India’s benchmark stock-index rose to an all-time high, led by metalmakers and energy companies, amid expectation that the new government will take measures to boost economic growth.
Sesa Sterlite Ltd., the nation’s top producer of copper and aluminum, surged to a three-year high, driving up the S&P BSE Metals Index to its highest level since August 2011. Tata Power Ltd., the largest non-state generator, rose 3.9 percent. Oil & Natural Gas Corp. climbed to a record. Hindustan Unilever Ltd. surged to a nine-month high.
The S&P BSE Sensex rose 0.9 percent to 25,019.51, closing above the 25,000 mark for the first time. The gauge has risen 18 percent this year on optimism Prime Minister Narendra Modi will boost efforts to curb inflation and revitalize the economy after his Bharatiya Janata Party won the vote with the biggest majority in three decades. The government may announce its first federal budget in July.
“The hope trade is piling on a daily basis and how much of that gets fructified we will know in the budget,” Manish Sonthalia, who manages $250 million as head of equities at the portfolio management services division of Motilal Oswal Asset Management Co. in Mumbai, said in an interview today.
Sesa surged 6.5 percent to 314.5 rupees. The stock rallied on expectation the company may get control of Hindustan Zinc Ltd. and win coal-mine approvals, Giriraj Daga, an analyst at Nirmal Bang Securities Pvt., said by phone today. Sesa owns 64.9 percent of Hindustan Zinc and the government has a 29.54 percent stake in the company, data compiled by Bloomberg show.
Tata Steel soared 3.6 percent to its highest level since August 2011 and Steel Authority rallied to more than a two-year high. Aluminum producer Hindalco Industries Ltd. advanced 5.7 percent to a near three-year high.
State-owned miner NMDC Ltd. rose to a 20-month high. The company has raised iron-ore prices by between 250 rupees and 300 rupees a ton for June, the Press Trust of India reported, without saying where it got the information.
Hindustan Unilever soared 4.2 percent to the highest close since September.
The S&P BSE Mid-Cap Index added 1 percent to 8,955.91, the highest close since Jan. 2008. The gauge has climbed 34 percent this year after losing 5.7 percent in 2013. The BSE Small-Cap Index has risen 47 percent this year.
“The rally is happening too fast, too soon,” Sonthalia said. “Such sharp rallies are prone to sharp corrections. Retail investors are in a frenzy to buy.”
Infosys Ltd., India’s second-largest software maker, rose 1.9 percent, the most in two weeks.
The Sensex is valued at 15.4 times projected 12-month earnings, the most expensive level since April 2011. The MSCI Emerging Markets Index is trading at a multiple of 10.9.
The CNX Nifty Index rose 1 percent to an all-time high of 7,474.1, taking its gain this week to 3.4 percent.
Overseas investors bought a net $111 million of domestic shares on June 3, taking this year’s inflows to $8.2 billion, the most among eight Asian markets tracked by Bloomberg.