Indian equities climbed, with the benchmark index halting five weeks of declines, after Prime Minister Manmohan Singh said policy changes in the past year will help stem the rupee’s slide and as oil prices fell.
HDFC Bank Ltd. gained the most in 20 months, driving up a gauge of 13 lenders to the biggest two-day climb in two months. Tata Consultancy Services Ltd., the nation’s largest software exporter, climbed to a record. Hindustan Unilever Ltd. had the biggest increase in more than a month. Oil slid as prospects of an imminent strike against Syria diminished.
The S&P BSE Sensex climbed 1.2 percent to 18,619.72 at the close. The gauge rose 0.5 percent this week, paring the month’s loss to 3.8 percent, the most since February. Stocks fell amid concern measures to support the rupee may further weaken an economy that grew at a decade-low pace in the year ended March. Steps to tackle current-account and budget deficits, curb some subsidies and speed up stalled projects will help the currency recover, Singh said in parliament in New Delhi.
“Stocks gained on anticipation the government may take further steps to arrest the rupee’s decline,” Jitendra Panda, head of broking at Capital First Ltd., said by telephone from Mumbai. “Decline in global oil prices helped sentiments.”
HDFC Bank jumped 3.8 percent to 594 rupees, the most since December 2011. State Bank of India, the largest, advanced 2.1 percent to 1,518.95 rupees. The S&P BSE Bankex index gained 3.3 percent in two days, the most since July 1.
Tata Consultancy Services surged 4.4 percent to 2,033.20 rupees, the most since its 2004 debut. Wipro Ltd. increased 2.1 percent to 483.6 rupees. Hindustan Unilever jumped 4 percent to 631.45 rupees, its highest since Aug. 1. Reliance Industries Ltd., owner of the world’s largest refining complex, rose 1 percent to 853.85 rupees, extending a two-day, 5.2 percent gain.
The rupee advanced 1.4 percent to 65.7050 per dollar. It rallied the most since 1986 yesterday after the central bank said it will sell dollars to the largest oil importers to cool foreign-exchange demand. The currency plunged 8.1 percent this month, the most since March 1992, making imports more expensive for a nation that buys 80 percent of its oil. Brent in London dropped a second day, losing 0.3 percent to $114.80 a barrel.
The currency’s slide has been fueled by concern slowing growth will deter foreign funds as the U.S. prepares to reduce stimulus. Global investors have pulled a combined $2.4 billion from local stocks and bonds this month, exchange data show.
“We need out-of-the-box thinking to restore confidence” in the economy, Madhusudan Kela, chief investment strategist at Reliance Capital Ltd., which runs India’s second-biggest mutual fund, said in an interview on Bloomberg TV India today. “Growth must be priority for the government.”
A government report today showed the economy expanded 4.4 percent in the quarter ended June, the slowest pace since 2009 and less than the median 4.7 percent estimated by economists in a Bloomberg survey. The data was released after trading ended.
The Sensex has fallen 4.2 percent this year. The slide has reduced its valuation to 13.2 times projected 12-month profit, compared with the average of 14.1 times in the past five years.