Indian Stocks Climb Most Since May 2009 as Rupee Extends Rally

Indian stocks surged, with the benchmark index posting its biggest advance in more than four years, as the rupee strengthened and the prospect of cheaper airwaves permits boosted phone companies.

Bharti Airtel Ltd. jumped the most in three years, leading other carriers higher, after the regulator yesterday suggested cutting prices for auctioning airwaves. Tata Motors Ltd. rose to a record, helping a gauge of automakers to its biggest gain in more than four years. The rupee climbed for a fourth day as weaker-than-forecast U.S. jobs data on Sept. 6 eased concern over the size of the Federal Reserve’s tapering and as oil slid for a second day.

The S&P BSE Sensex increased 3.8 percent to 19,997.1 in Mumbai, the biggest gain since May 2009, as trading resumed after a holiday. The index climbed the most in more than four months last week after new central bank Governor Raghuram Rajan announced plans to boost the financial sector and support the currency that touched a record low on Aug. 28. Emerging-market stocks reached a three-month high as data showed China’s economy is improving and a Russian proposal to have Syria surrender its chemical weapons eased concern over a U.S. strike.

“The rally is continuing as the Reserve Bank of India’s measures have helped stem the slide in the rupee,” Vaibhav Sanghavi, director with Ambit Investment Advisors in Mumbai, said by telephone. “Global factors like positive China data, de-escalation of the Syrian crisis and disappointing data from U.S. jobs market helped sentiments.”

Telecoms, Autos

Bharti rallied 7.8 percent to 338.35 rupees, the largest increase since July 2010. Reliance Communications Ltd. added 1.6 percent to 141.8 rupees, the highest close since July 19 and Idea Cellular Ltd. jumped 5.5 percent to 166.85 rupees, the most since July 31.

Tata Motors surged 10 percent to 349.6 rupees after sales of Jaguar Land Rover climbed 28 percent from a year earlier to 27,852 vehicles in August. Two-wheeler producer Hero MotoCorp Ltd. jumped the most since December 2010. The S&P BSE India Auto index had its biggest rally since May 2009.

Coal India Ltd., the world’s biggest producer, jumped 3.9 percent to 288.2 rupees and engineering company Larsen & Toubro Ltd. surged the most since May 2009. Goldman Sachs Group Inc. added the two stocks to its Asia-Pacific Conviction buy list, according to separate investor notes.

The S&P BSE 200 and the S&P BSE 500 indexes advanced the most in two years. The MSCI Emerging Markets Index added 1.4 percent to 987.37 at 4:55 p.m. Mumbai time.

Rupee Rally

The rupee rallied 2.2 percent from Sept. 6 to 63.84 per dollar. The currency, which fell to a record 68.845 on Aug. 28, has climbed 6 percent in the past four days, the most since at least 1973. The RBI last week said it will provide concessional swaps for banks’ foreign-currency deposits that Bank of America Merrill Lynch say will boost India’s reserves by $10 billion.

Brent-oil futures for October delivery fell as much as 1 percent to $112.61 a barrel after the U.S. said Russia’s bid to get Syria to give up its chemical weapons may avert a strike. Prices climbed 5.9 percent in August, a third month of gains, raising costs for India that imports 80 percent of its oil.

“The euphoria triggered by the gain in the rupee and the drop in oil forced equity traders to aggressively cover their short positions,” Gajendra Nagpal, chief executive officer at Unicon Financial Intermediaries Ltd., said by phone.

India is also the world’s largest buyer of gold, the price of which fell 1.4 percent to $1,367.3 an ounce. A drop in the costs of crude and bullion help ease pressure on the nation’s public finances at a time when the prospect of a cut in U.S. stimulus has spurred concern capital outflows may accelerate.

Fed Review

Non-farm payrolls in the U.S. climbed 169,000 in August, data showed Sept. 6, trailing the 180,000 median estimate in a Bloomberg News survey. The Fed has said the jobs market needs to show signs of improvement to warrant any trimming of asset purchases as policy makers prepare to meet Sept. 17-18 to review the plan.

Foreign investors bought a net $194 million of domestic shares on Sept. 6, the most since July 1, data from the market regulator released today show. That boosted this year’s net inflow to $11.75 billion, the second-highest among 10 Asian markets tracked by Bloomberg. They pulled $3.7 billion from local equities in the three months to Aug. 30, the most since the global financial crisis in 2008, as capital fled Asia’s third-biggest economy amid slowing economic growth, a record current-account deficit and a weak currency.

The Sensex has advanced 2.9 percent this year in local currency terms and is valued at 14.2 times projected 12-month earnings, compared with the five-year average of 14.1 times, data compiled by Bloomberg show. It has lost 12 percent this year in dollar terms. The MSCI Emerging Markets Index trades at 10.5 times.

, after sales at its Jaguar Land Rover unit increased 28 percent in August

Before it's here, it's on the Bloomberg Terminal. LEARN MORE