Indian stocks rose the most in Asia after Europe, the country’s top trading partner, reached a deal on Greece and as Moody’s Investors Service repeated its stable outlook on the South Asian nation’s credit rating.
The 30-stock BSE India Sensitive Index added 1.7 percent to 18,842.08 at the close, the steepest gain in two months. All 10 industry groups advanced on the MSCI India Index. Housing Development Finance Corp., the biggest mortgage lender, and HDFC Bank Ltd. soared to records, contributing a quarter of the gains in the Sensex. Sterlite Industries (India) Ltd. and Infosys Ltd. climbed for the second day.
Euro-area finance ministers cut Greece’s interest rates and gave it more time to pay back loans while dismissing calls for debt relief that may be needed to keep the country afloat over the longer term. India’s rupee halted a five-day decline after Moody’s said the country’s Baa3 rating is supported by economic growth that’s more than emerging-market averages.
“The newsflow on Europe and Moody’s contributed to the positive sentiment,” Kaushik Dani, a fund manager at Peerless Mutual Fund, which has $886 million in assets, said by phone from Mumbai. “Foreign flows have been strong irrespective of weak economic macros and political uncertainties, signaling the confidence investors have in India’s long-term growth.”
Housing Development Finance surged as much as 3.4 percent to 802 rupees, an intraday record. The stock added 3 percent to 799.2 rupees at close, the most since Aug. 13. HDFC Bank jumped 2.8 percent to 680.5 rupees, the highest-ever closing price. Sterlite soared 3.6 percent to 102 rupees. Infosys, which gets 98 percent of its sales from overseas, added 2.2 percent to 2,470.65 rupees.
Overseas funds have been buyers of local shares for all but one day this month even as Prime Minister Manmohan Singh’s government struggles to reach an accord with opposition parties on plans to attract foreign retailers. Foreigners have bought a net $19.2 billion of shares this year, the most among 10 Asian markets tracked by Bloomberg, excluding China, data from the nation’s market regulator show.
“We are confident of the numbers,” Singh told reporters in New Delhi today after a meeting with his allies, the Press Trust of India reported.
The government refused to concede to opposition demands for a vote in parliament on retail reform, part of a package of measures to spur growth in an economy that probably grew at the weakest pace since 2009 in the September quarter.
Gross domestic product may have grown 5.3 percent in the September quarter from a year ago, Finance Minister Palaniappan Chidambaram forecast Nov. 24. Economists forecast a 5.2 percent growth in the economy, according to the median estimate in a Bloomberg survey before data due Nov. 30.
Moody’s said the high home-savings rate and a relatively competitive private sector will help boost expansion from 5.4 percent in the year to March 2013 to 6 percent or higher the following year. Standard & Poor’s and Fitch Ratings cut their outlooks to negative earlier in 2012. All three rank the nation at the lowest investment-grade level.
The Sensex has rallied 22 percent this year, driven by foreign inflows and government policy reforms. The gauge is the second-best performer this year among benchmark measures in nations with at least $1 trillion in stock market value, data compiled by Bloomberg show.
While Singh’s September decision to allow companies such as Wal-Mart Stores Inc. to open supermarkets doesn’t require parliamentary approval, rejection of the proposals in a vote may expose the weakness of Singh’s minority administration.
Parliament has been adjourned since it resumed sitting Nov. 22 as the opposition led by the Bharatiya Janata Party accused the government of reneging on its promise to win the support of the legislature before moving ahead with the policy.
India’s rupee gained 0.5 percent to 55.4550 per dollar in Mumbai today. The currency has slid 3.4 percent in the past month, the worst performer in Asia.
“We expect the rupee to rally from here,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd., which has about $100 million in assets, said from New Delhi. “Foreign funds can make 10 percent gains on the currency in the next five to six months and that’s also contributing to the rally today.”
Overseas investors were buyers of domestic shares for a ninth day yesterday, purchasing a net $37 million of stocks, data from the regulator show.
The Sensex is valued at 15.4 times estimated earnings, compared with the MSCI Emerging Markets Index’s 11.5 times, data compiled by Bloomberg show.
The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. soared 1.6 percent to 5,727.45. Its November futures settled at 5,732.05.
India VIX, which measures the cost of protection against losses in the Nifty, plunged 4.8 percent to 13.96, its sixth day of decline. Trading volumes of Nifty shares were 27 percent higher than the 30-day average, data compiled by Bloomberg show.