Indian stocks advanced the most in Asia amid speculation falling oil prices will cool inflation after Iran agreed to limit its nuclear program in exchange for relief from some sanctions.
Hindustan Petroleum Corp., a state-run refiner, and Oil & Natural Gas Corp., the largest state explorer, had the biggest rally in more than two months. Axis Bank Ltd. ended a four-day loss on a plan to add the lender to the S&P BSE Sensex. Bharat Heavy Electricals Ltd. was the best performer on the Sensex.
The Sensex jumped 1.9 percent to 20,605.08 at the close. Wholesale prices in India, which imports about 80 percent of its oil, climbed 7 percent in October, the fastest pace since February, data showed this month. The lifting of a European Union ban on insuring tankers carrying Iranian crude as part of a nuclear deal will ease the process of buying the Persian Gulf state’s oil, according to Indian refiners. Brent crude headed for the biggest drop in three weeks.
“The Iran deal impacts the oil market as well as India’s economy and that improved sentiments here,” Dipan Mehta, a member of the BSE Ltd., said on Bloomberg TV India today.
The Reserve Bank of India raised its key interest rate on Oct. 29, the second straight increase, to fight inflation. The authority is due to review monetary policy on Dec. 18.
Hindustan Petroleum soared 5.7 percent, the biggest gain since Sept. 6. Indian Oil Corp., the nation’s biggest state refiner, climbed 2.6 percent to 205.85 rupees. Bharat Petroleum Corp. surged the most since Sept. 27. Oil & Natural Gas gained 3.7 percent, the biggest increase since Sept. 19.
Reliance Industries Ltd., the owner of the world’s largest refining complex, added 0.9 percent, ending a three-day fall.
Axis Bank increased 3.1 percent, ending a four-day, 5.1 percent drop. The stock will be added to the Sensex from Dec. 23. ICICI Bank Ltd. jumped 5.3 percent. The 13-member S&P BSE Bankex surged the most since Oct. 29 after declining 6.7 percent in the three weeks ended Nov. 22.
“Banks stocks saw some short-covering ahead of the expiry this week,” Siddarth Bhamre, an analyst at Angel Broking Ltd., said by telephone from Mumbai. Indian derivatives expire on the last Thursday of every month.
Power-equipment maker Bharat Heavy soared 5.2 percent, the most in two months, while engineering company Larsen & Toubro Ltd. added 4 percent to 1,002.65 rupees.
The Sensex has gained 6.1 percent this year, the largest increase among the four biggest emerging markets, and trades at 13.5 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.6 times.
Global investors bought a net $2.7 million of local shares on Nov. 22, taking this year’s inflows to $17.2 billion, according to data from the market regulator.
The CNX Nifty Index increased 2 percent to 6,115.35. The India VIX gained 5 percent.