India’s benchmark stock-index had the biggest gain in more than a week, led by energy companies and industrials, as the rupee reversed losses and oil dropped.
Oil & Natural Gas Corp., the country’s biggest explorer, surged 4.3 percent, helping a gauge of 10 energy companies to its biggest gain in a week. Reliance Industries Ltd., owner of the world’s largest refining complex, rose for the first time in six days. Axis Bank Ltd. had the steepest gain in a month.
The S&P BSE Sensex added 1.3 percent to 25,521.19 at the close, rebounding from an intraday loss of 0.3 percent in the final hour. The gauge fell for two days through yesterday on concern rising oil prices and forecast for below average rain will undermine Prime Minister Narendra Modi’s efforts to revive economy growth. Foreigners have bought a net $9.9 billion of local shares this year, the most among eight Asian markets tracked by Bloomberg.
“It’s go to do with liquidity from abroad, and every time the market corrects that liquidity comes and there’s a spike,” Ajay Srivastava, managing director of Dimensions Consulting Pvt., said in an interview with Bloomberg TV India today.
Oil & Natural Gas rallied to the highest since June 9 and Reliance ended a five-day, 5.1 percent retreat. The S&P BSE India Oil Index surged 2.9 percent.
Axis Bank rallied to a one-week high. State Bank of India gained 2.8 percent.
The S&P BSE Mid-Cap Index rose 1.5 percent, the steepest advance in a week, and an index of 446 small-sized companies gained 2 percent, the highest level since June 12. The indexes have rallied at least 36 percent this year, faster than the 20 percent gain in Sensex.
The rupee gained 0.2 percent to 60.0187 per dollar, ending a two-day losing streak. It fell as much as 0.6 percent earlier to 60.5250, the weakest level since April 20, after losing 1.5 percent in the previous two days.
Brent crude, a benchmark for India, fell for a second day on signs violence in Iraq may not hurt the nation’s oil supply. It increased 4.4 percent last week, the most since July. India imports almost 80 percent of the oil it uses and an increase in energy costs can exacerbate price pressures.
India’s wholesale-price inflation in May quickened at the fastest pace since December, government data showed yesterday. Consumer-price gains rose to 8.59 percent in April, the highest among 18 Asian economies tracked by Bloomberg.
Overseas investors bought a net $210.2 million of Indian shares on June 13. The Sensex trades at 15.7 times projected 12-month profits, near the most expensive in more than three years. The MSCI Emerging Markets Index is valued at a multiple of 11, data compiled by Bloomberg show.