Indian shares traded in New York gained to the highest level in five months and ICICI Bank Ltd. surged the most since June after the Indian government approved measures to open up foreign direct investment in the retail and aviation sectors.
The Bank of New York Mellon India ADR Index climbed 3.4 percent to 1,037.36 by 12:02 p.m. in New York, the highest since April 12. ICICI, the biggest private lender, and Tata Motors Ltd., the owner of Jaguar Land Rover, led gains.
India ended a ban on local airlines selling stakes to overseas carriers, opening a new possible source of funding for operators struggling to turn rising travel demand into profits. The government also allowed overseas retailers like Wal-Mart Stores Inc. and Carrefour SA to own 51 percent of supermarket chains, a move shelved last year after alliance partners threatened to revolt.
“The positive moves by the Indian government on reforms and the easing of financial conditions globally are the main reasons responsible for this gain,” Walter Rossini, a fund manager with Aletti Gestielle SGR SpA, said by phone from Milan. “The real issue is not the announcement but the implementation of this policy. We have seen this noise in the past but maybe this time it is different.”
ICICI Bank gained 6.3 percent to $38.66 in New York, the highest since Feb 21. Tata Motors increased 5.9 percent, the most in three months, to $25.38. Sterlite Industries India Ltd. surged the most since January, jumping 8 percent to $7.70.
The iPath MSCI India Index ETN, an exchange-traded note that tracks India’s equity market, gained 3.8 percent to $56.46, the highest since April 12. India’s benchmark BSE India Sensitive Index, or Sensex, rose 2.5 percent to 18,464.27, its highest close since July 26, 2011.