Indian equities climbed the most in Asia, driving the benchmark index to its highest close in three years, amid speculation capital inflows will accelerate as the U.S. Federal Reserve maintains stimulus.
Sesa Sterlite Ltd., the nation’s biggest copper producer, surged to a nine-month high. ICICI Bank Ltd. and HDFC Bank Ltd., India’s biggest non-state lenders, advanced more than 3 percent each. Reliance Industries Ltd., owner of the world’s largest refining complex, climbed to a three-month high.
The S&P BSE Sensex soared 2.3 percent to 20,882.89 at the close, the highest level since November 2010. The Fed shouldn’t begin paring bond purchases because the government halted data used to gauge the economy’s health during its 16-day shutdown, Chicago Fed President Charles Evans said yesterday. Overseas investors have bought a net $1.2 billion of local shares this month, adding to inflows of $2 billion in September, data from the market regulator show.
“India will gain from an increased appetite for emerging markets as optimism grows the Fed will delay tapering after the U.S. government shutdown,” said Shishir Bajpai, a senior vice president at IIFL Wealth Management Ltd., which has about $1.8 billion of shares under management and advisory.
ICICI Bank jumped 4.6 percent, the most since Oct. 11. HDFC Bank, the biggest by market value, increased 3.4 percent. Indusind Bank Ltd. surged 6.3 percent, the most since Sept. 5, helping the S&P BSE Bankex Index end two days of losses.
Sesa Sterlite rallied 5.8 percent to 194.90 rupees, the highest price since Jan. 14. Copper rose, set for the biggest weekly gain in four, after China’s economic growth quickened for the first time in three quarters, bolstering the demand prospect for metals in the largest user. Tata Steel Ltd. surged 6.1 percent, taking the month’s rally to 21 percent.
“China data is good news for all commodities,” Kaushik Dani, a fund manager at Peerless Mutual Fund, which has about $725 million in assets, said by phone from Mumbai.
Reliance, controlled by billionaire Mukesh Ambani, gained 2.9 percent to 905.65 rupees, the highest close since July 24. Tata Power Ltd. climbed, halting a five-day, 8.2 percent slide.
Overseas funds were net buyers of local stocks for a 10th day on Oct. 16, the longest run of purchases since May. That took this year’s inflow to $14.6 billion, the second-largest after Japan among 10 Asian markets tracked by Bloomberg.
Larsen & Toubro Ltd., India’s largest engineering company, said after the market closed second-quarter profit dropped 14 percent to 9.78 billion rupees from a year earlier. That beat the 8.94 billion-rupee median of estimates in a Bloomberg News survey. The stock jumped 4.2 percent, its first gain this week.
Profits at all six Sensex companies that have announced earnings for the quarter ended September so far have exceeded or matched estimates. About 47 percent of the 30 companies in the index missed forecasts in the previous quarter.
“The earnings season has begun on a good note and fund inflows have been steady, and that’s holding up markets quite well,” Peerless’ Dani said.
The Sensex has risen 7.5 percent this year and is valued at 14.3 times estimated 12-month profits, compared with the MSCI Emerging Markets Index’s 10.8 times.
The CNX Nifty Index jumped 2.4 percent to 6,189.35. The India VIX, which gauges the cost of protection against losses in the Nifty, lost 4.5 percent, its lowest level in two months. VIX has slumped 25 percent since Oct. 1 after steps taken by the central bank and the government resulted in rupee stability and a lower current-account deficit, Rajesh Kothari, managing director of AlfAccurate Advisors Pvt., said by e-mail.