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Sensex Climbs Most in a Month as Reliance, ONGC Advance in India

Dec. 20 (Bloomberg) -- India’s benchmark stock index rose the most in a month, led by energy companies, after the government approved an increase in the price of natural gas.

Reliance Industries Ltd. posted its biggest gain in seven months and Oil & Natural Gas Corp. climbed 4.1 percent, helping an industry gauge surge the most in four years. Wipro Ltd. had the steepest climb in three months, pacing gains among software exporters. The rupee weakened for a fourth day.

The S&P BSE Sensex jumped 1.8 percent to 21,079.72 at the close, the most since Nov. 25, with bulk of the gains coming in the last hour of trade. The Cabinet yesterday upheld a decision to double the price of natural gas from April. Foreign funds have bought a net $663 million of shares after the Reserve Bank of India unexpectedly maintained interest rates on Dec. 18, allaying concerns inflows may slow after the Federal Reserve said the same day it will start unwinding stimulus.

“The gas price increase will boost the profitability of energy companies,” Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., said by phone from New Delhi. “Foreign fund flows have been strong even after the taper news, and that is supporting the market sentiment.”

For the week, the Sensex also climbed 1.8 percent.

Reliance surged 4.8 percent to 895.15 rupees, the biggest gain since May 27. Oil & Natural Gas jumped the most since Sept. 19. The S&P BSE India Oil & Gas Index surged 3.8 percent, the sharpest climb since November 2009.

Wipro, Infosys

Wipro, the third biggest software exporter, increased 3.7 percent to its highest level since March 2000. Tata Consultancy Services Ltd., the biggest, rallied 1.9 percent, a fifth day of gains. Infosys Ltd., the second-largest, climbed to a record.

The three companies, which receive more than 90 percent of their sales from overseas, are among the top four performers on the Sensex in 2013 as an 11 percent decline in the rupee and economic revival in developed nations boosts the outlook for Indian exporters.

Accenture Plc, the second-largest technology-consulting company, reported quarterly net income that beat estimates as demand for its services revived in the U.S. and Europe. The company is considered a bellwether for the software-services market because its earnings cycle ends one month sooner than competitors.

“Positive data from the U.S., the main export market, is helping technology stocks,” said Thunuguntla.

The rupee fell 0.1 percent to 62.18 per dollar, a fourth day of losses. It touched 62.4775 yesterday, its weakest level since Dec. 4.

Inflation

RBI Governor Raghuram Rajan kept the benchmark repurchase rate at 7.75 percent on Dec. 18, saying the central bank may act at its meeting on Jan. 28 if inflation does not ease in the next round of data releases.

Wholesale prices rose in November at the fastest pace in 14 months and consumer prices climbed the most in data going back to January 2012. Economic growth of 4.8 percent in the quarter ended September was below 5 percent for a fourth quarter.

The Sensex has climbed 8.5 percent this year, the best performer among the four largest emerging markets, and trades at 13.7 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.3 times.

Global investors bought a net $304.6 million of domestic shares on Dec. 18, data from the regulator showed. That took this year’s inflow to $19.2 billion, the most in Asia after Japan, data compiled by Bloomberg show.

The CNX Nifty Index increased 1.7 percent to 6,274.25. The India VIX fell 3.4 percent.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net

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