India’s benchmark stock index rose to a two-week high, led by industrial companies and banks, amid speculation inflows will increase as the U.S. maintains its record monetary stimulus.
Engineering company Larsen & Toubro Ltd. climbed to its highest level in four months. State Bank of India rose for a fourth day. Carmaker Maruti Suzuki India Ltd. increased to a six-month high. The rupee touched a two-week high.
The S&P BSE Sensex increased 0.2 percent to 20,890.82 at the close, the highest level since Nov. 6, after fluctuating between gains and losses eight times. Federal Reserve Chairman Ben S. Bernanke will speak in Washington today after Fed Bank of New York President William Dudley said yesterday that while he’s “more hopeful” the U.S. economy is strengthening, it’s not enough to warrant stimulus cuts. Overseas funds have bought a net $608 million of local shares in November, extending $4.9 billion of inflows in the previous two months.
“Money will come to the Indian market as long as global liquidity flows freely,” Suhas Naik, chief operating officer at Mumbai-based IL&FS Portfolio Management Services Ltd., which has $100 million, said by phone today. “The market may stay volatile in the near term due to weak local economic factors.”
The rupee climbed 0.1 percent to 62.3750 per dollar. It touched 61.87 during the day, the strongest level since Nov. 6. The rupee slid to a two-month low on Nov. 13 after data showed inflation quickened last month by more than economists had predicted and factory output missed estimates. The Reserve Bank of India in October cut its forecast for economic growth in the year ending March 2014 to 5 percent from an earlier prediction of 5.5 percent.
Larsen & Toubro advanced 1.8 percent to 995.85 rupees, the highest close since July 15. Power-equipment maker Bharat Heavy Electricals Ltd. climbed to a two-week high. The S&P BSE India Capital Goods Index jumped to its highest level since July 19.
Maruti jumped 3.3 percent to 1,682.55 rupees, the highest close since May 22. The S&P BSE India Auto Index completed a four-day, 4.9 percent rally, the biggest in two months.
State Bank rallied 3.2 percent, the most in two weeks. The stock climbed for the fourth day, the longest such streak in a month. Punjab National Bank rose 3.6 percent, the top performer on the S&P BSE India Bankex index, which climbed to its highest level since Nov. 6.
The Sensex has gained 7.5 percent this year and trades at 13.7 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.7 times.
The CNX Nifty Index on the National Stock Exchange of India Ltd. gained 0.2 percent to 6,203.35.
Net incomes of 70 percent of Sensex companies have beaten analyst estimates for the quarter ended Sept. 30, according to data compiled by Bloomberg. About 47 percent of the 30 index members missed forecasts in the previous quarter.