India’s benchmark stock-index rose to a record as industrials, metal producers and banks advanced.
Sesa Sterlite Ltd. (SSLT), owned by billionaire Anil Agarwal, was the best performer on the S&P BSE Sensex (SENSEX) after the nation’s top court ended an 18-month ban on iron-ore mining in the western state of Goa. Larsen & Toubro Ltd. (LT) increased to more than a three-year high, sending a measure of engineering companies to its highest since September 2011. State Bank of India climbed 2.7 percent, a second day of gains.
The S&P BSE Sensex rallied 0.6 percent to 22,764.83 at the close. The gauge has risen 7.5 percent this year, the most among indexes in the four largest emerging markets, amid optimism a victory for the opposition Bharatiya Janata Party will produce a government with a mandate to spur economic growth from near a decade-low. Foreign investors have bought $4.7 billion of local shares this year, the most in Asia after Taiwan, data compiled by Bloomberg show.
“Optimism about the election results is still getting built into stock prices,” Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., said by phone from New Delhi today. “It is a kind of market where you are either bullish or you are out of it.”
Several opinion polls have projected the coalition led by the BJP will win the election for the 543-seat lower house of India’s parliament. For the first time, a survey released on April 14 found that the coalition may win an outright majority. Counting will take place on May 16.
Sesa Sterlite jumped 4.6 percent. The western state can produce a maximum 20 million metric tons a year after miners renew their leases with the Goa government, a three-judge Supreme Court bench said in its order. A court-appointed panel will submit an environmental impact report in six months and give its assessment on increasing the output limit. Sesa owns the biggest mines in the province.
Larsen & Toubro increased 4.2 percent to the highest since December 2010. Bharat Heavy Electricals Ltd. added 2.8 percent to the highest level in a week.
The rally was also aided by better-than-expected quarterly profits from some of the nation’s largest companies including Reliance Industries Ltd. Four out of the 30 Sensex companies that have reported earnings for the three months ended March 31 have either exceeded or matched estimates.
Reliance climbed for a second day after the operator of the world’s biggest oil refinery complex reported on April 18 its highest quarterly profit in more than two years. The markets were closed on April 18 for a holiday.
The CNX Nifty Index on the National Stock Exchange of India Ltd. surged 0.6 percent to a record 6,817.65. The India VIX index, a gauge of options prices, surged 11 percent to its highest level since October 2011.
Overseas investors bought a net $67.6 million of shares on April 17, ending three straight days of withdrawals, according to data compiled by Bloomberg.
The Sensex trades at 14.3 times projected 12-month profits, in line with the average multiple over the past five years. The MSCI Emerging Markets Index has gained 0.9 percent in 2014 and is valued at 10.5 times.
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