India’s benchmark index increased for a second day, led by Larsen & Toubro Ltd., after Goldman Sachs Group Inc. upgraded the stock. Software makers rose after U.S. services industry grew at the fastest pace in a year.
The S&P BSE Sensex index added 0.6 percent to 19,252.61 at the close, its highest level since Feb. 25. Larsen & Toubro, India’s largest engineering company, jumped 2.6 percent after Goldman Sachs joined Nomura Holdings Inc. and Jefferies India Pvt. this month in raising the stock’s rating. Infosys Ltd., the second-biggest software maker, jumped to a 20-month high.
The Dow Jones Industrial Average rallied to a record yesterday, erasing losses from the financial crisis, as the U.S. service industry expanded at the fastest pace in a year and investors bet global central banks will continue stimulus measures. India’s largest software exporters get at least half their revenue from the U.S.
For Indian stocks “a lot is going to depend on how the global markets behave and how world economies respond to the problems they face,” Sanjay Sinha, founder of Mumbai-based Citrus Advisors, told Bloomberg TV India today.
Asian stocks increased, with the MSCI Asia Pacific Index touching the highest level since August 2011. Japan’s Nikkei 225 Stocks Average climbed 2.1 percent to its highest close since September 2008, and the MSCI Emerging Markets Index rose 0.6 percent, bound for its highest close since Feb. 20.
Larsen jumped 2.6 percent to 1,432.30 rupees to complete its biggest two-day gain since Sept. 17. The stock was raised to buy from neutral at Goldman Sachs. Infosys rose 1.7 percent to 2,970.10 rupees, the highest close since July 2011. Smaller rival Wipro Ltd. added 2 percent to 441.90 rupees, the highest level since April. Tata Motors Ltd., the owner of Jaguar and Land Rover luxury brands, rallied 3 percent to 309.40 rupees in a fifth day of gains.
The Sensex fell for five straight weeks through March 1, dropping to a three-month low on Feb. 28, as third-quarter net incomes at companies from Tata Motors to State Bank of India missed estimates for the December quarter and the pace of the nation’s economic expansion slowed.
A government report showed last week the economy grew 4.5 percent from a year ago in the final three months of 2012, the weakest pace in almost four years. Earnings at 43 percent of Sensex companies missed estimates in the three months through Dec. 31, compared with 40 percent in the previous two quarters, data compiled by Bloomberg show.
The Sensex is valued at 13.6 times projected 12-month profits, compared with 14.3 times on Jan. 25, when it climbed to a two-year high, data compiled by Bloomberg show. Volumes on the gauge were 7.4 percent more than the 30-day average.
Sterlite Industries (India) Ltd., the nation’s top copper maker, surged 4.5 percent to 99 rupees, extending yesterday’s 4.8 percent rally. The stock completed an eighth week of losses on March 1. Aluminum maker Hindalco Industries Ltd. climbed 3.3 percent to 101.80 rupees. The S&P BSE Metal index gained for a second day, rising 2.2 percent. The gauge of 11 producers sank 14.5 percent in February and 4.2 percent in January.
The 50-stock CNX Nifty Index of the National Stock Exchange of India Ltd. jumped 0.6 percent to 5,818.60 while its March futures settled at 5,841.35. India VIX, which measures the cost of protection against losses in the Nifty, added 0.1 to 13.40, ending five days of losses.