Indian Stocks Gain on Reform Speculation, Consumers Stock

Indian stocks rose amid speculation the government will revive its economic reform agenda after gasoline prices were raised for the first time in two months.

Hindustan Unilever Ltd. rose to a record after the unit of the world’s second-largest consumer goods company reported net income doubled. Reliance Industries Ltd., owner of the world’s biggest oil-refining complex, climbed for the first time in three days. The BSE India Sensitive Index, or Sensex, added 0.2 percent to 16,918.08 at close.

Indian Oil Corp. increased gasoline prices by 1 percent to 68.48 rupees ($1.2) per liter. Hindustan Petroleum Corp. and Bharat Petroleum Corp. follow Indian Oil’s action. The revision would help the finances of state refiners, which are forced to sell fuels at below-market rates. Prime Minister Manmohan Singh is under pressure to bolster an economy growing at the weakest pace in almost a decade as policy gridlock deters investment and Europe’s debt crisis hampers exports.

“There is expectation the government will initiate reforms in a calibrated fashion,” Vijai Mantri, managing director of Pramerica Asset Managers Pvt., told Bloomberg UTV today. “If we have iconic reforms like opening up of retail and aviation to foreign investment, it creates more excitement in the minds of foreign investor and has potential to change the country’s rating from global agencies.”

India faces becoming the first BRIC country to lose its investment grade rating, Standard & Poor’s and Fitch Ratings said last month.

Hindustan Unilever jumped 7.5 percent to 476.2 rupees, its highest-ever price, after first-quarter net income rose to 13.3 billion rupees from 6.27 billion rupees a year ago. The figure includes a one-time gain of 6.07 billion rupees. The median of 25 analysts’ estimates compiled by Bloomberg News was a 6.96 billion-rupee profit.

Missing Estimates

ITC, which has the highest weighting in the Sensex, rose 0.3 percent to 250.3 rupees. Reliance rose 0.8 percent to 724.5.

Wipro Ltd., India’s third-largest software exporter, fell 3 percent to 345.9 rupees after reporting first-quarter profit that missed estimates. Net income climbed 19 percent to 15.8 billion rupees in the June quarter. The median of 42 analysts’ estimates compiled by Bloomberg was a 16 billion-rupee profit.

Five out of 11, or 45 percent, of companies on the Sensex that have reported June-quarter results have missed analyst estimates, data compiled by Bloomberg show. That compares with 30 percent in the March quarter and 47 percent three months earlier, data show.

Jindal Steel & Power Ltd. fell 0.1 percent to 414.8 rupees. The second-biggest steelmaker may post first-quarter profit of 10.9 billion rupees, up from 9.33 billion rupees a year ago, according to the median of 15 analysts’ estimates.

VIX Falls

Sesa Goa Ltd. increased 1.3 percent to 186 rupees. The iron-ore miner may report net income of 9.34 billion rupees, up from 8.41 billion rupees a year earlier, according to the median estimate of 19 analysts.

India VIX, which measures the cost of protection against losses in the S&P CNX Nifty Index, fell 9.1 percent to 16.97, the most since June 18. The Nifty index gained 0.2 percent to 5,128.20 and its July futures settled at 5,135.95. The BSE-200 Index rose 0.3 percent. Combined volume on the nation’s top two bourses was 696 million shares yesterday, 23 percent less than the 12-month daily average of 900 million shares.

Overseas investors bought a net 3.22 billion rupees of local stocks yesterday, the 16th day of net purchases, raising total investment in Indian equities this year to $10.1 billion. That’s the highest inflow in Asia this year and a record for the period, according to data compiled by Bloomberg.

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