Sensex Climbs to 3-Week High as Coal India Rallies Amid Inflows

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Indian stocks rose for a fourth day, with the benchmark gauge holding at a three-week high, as resources and energy companies rallied amid inflows from global investors.

Coal India Ltd., the world’s biggest producer of the fuel, jumped the most in 10 months after Business Standard reported the government has eased limits on electronic sales at market prices. Reliance Industries Ltd., owner of the world’s largest refining complex, climbed the most in a month. Tata Consultancy Services Ltd. extended a two-day, 1.7 percent rally.

The S&P BSE Sensex gained 0.7 percent to 28,707.75, the highest close since March 17. Foreigners purchased a net $41.4 million of local shares on Tuesday, taking this year’s inflows to $6.3 billion, the most in Asia. Templeton Emerging Markets Group is “waiting for a correction” in India to boost its holdings of the nation’s equities, Executive Chairman Mark Mobius said in Hong Kong Wednesday.

“The outside view of India is far stronger than the inside view,” Abhay Laijawala, the head of research at Deutsche Equities India Pvt., said in an interview to Bloomberg TV India. India has “a very energetic government that is intent on reforms and investors are willing to wait” for the policy changes to filter through to company earnings, he said.

Laijawala, the most accurate Sensex forecaster last year in Bloomberg surveys, has maintained the 2015 target at 33,000 even as some of his peers have trimmed their estimates for the equity gauge amid concerns about a revival in earnings.

Coal India climbed 5.8 percent, the most since June 9. Reliance rallied 4 percent, the biggest advance since March 3, and Tata Consultancy added 2.2 percent in a third day of gains.

‘Valuation Comfort’

The S&P BSE Small-Cap Index increased 1.8 percent to its highest since January 2008. The gauge tumbled 3.3 percent in March, dragging down its valuation to 12.29 times projected 12-month profits, the cheapest since October. That compares with the Sensex’s multiple of 16.

“There’s valuation comfort in the small and mid-sized stocks as the large-caps have run up,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from the southern Kerala state.

Housing Development & Infrastructure Ltd. increased 3.9 percent to its highest close since August 2011, pacing gains among property developers, after the government approved the Real Estate Regulatory Bill. Indiabulls Real Estate Ltd. added 2.3 percent and Unitech Ltd. rose 3.2 percent.

Anant Raj Ltd. gained 4.7 percent, Omaxe Ltd. climbed 2.2 percent and Puravankara Projects Ltd. surged 8 percent.

Housing Development has soared 29 percent this week as the company plans to cut debt by 7.5 billion rupees in the current financial year, Managing Director Sarang Wadhawan said in an interview to Bloomberg TV India on Wednesday.

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