Indian equities climbed the most in three weeks with global stocks after Greece reached an agreement with its creditors to remain in the euro.
GAIL India Ltd., a state-run supplier of natural gas, was the best performer on the S&P BSE Sensex. Sun Pharmaceutical Industries Ltd., India’s most valuable drugmaker, paced gains among its peers. Tata Consultancy Services Ltd., the largest software exporter, gained for the first time in five days, and Maruti Suzuki India Ltd. advanced the most in six weeks.
The Sensex jumped 1.1 percent to 27,961.19 at the close in Mumbai. The Stoxx Europe 600 Index climbed 1.8 percent, and futures on the Standard & Poor’s 500 Index erased a decline to rise 0.8 percent. The Sensex fell 1.5 percent last week, ending three weeks of advances, amid fluctuations in Chinese stocks and uncertainty related to Greece.
“Greece was one of the biggest overhang on global markets and that has been taken care of,” Aneesh Srivastava, who manages $722 million as chief investment officer at IDBI Federal Life Insurance Co., said by phone on Monday.
After almost 17 hours of talks in Brussels, Greece and European leaders agreed on reforms needed to start talks for a third bailout in five years, European Union President Donald Tusk said on Twitter.
Back home, investors awaited the release of consumer inflation data later on Monday. Analysts surveyed by Bloomberg forecast retail inflation in June will climb to 5.10 percent compared with a rate of 5.01 percent in May.
Concern over price pressures has resurfaced as potentially deficient monsoon rains threaten to hurt crops and stoke food costs. The weather bureau predicts the June-September showers to be 88 percent of a 50-year average this year. While rains have been 2 percent below normal since June 1, Finance minister Arun Jaitley said Sunday the monsoon is likely to be better than last year.
“With good prospects for the monsoon, inflation is expected to come down,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd., said by phone from New Delhi today. “If inflation is in control, chances of a rate cut brighten.”
RBI Governor Raghuram Rajan linked further policy action to the strength of the monsoon as he cut benchmark borrowing costs for a third time this year on June 2. India’s industrial output climbed 2.7 percent in May from a year earlier, official data showed after the close of markets Friday. That missed the median estimate of 4 percent in a Bloomberg survey.
GAIL India rallied 3.3 percent to its highest level since July 7. Sun Pharmaceutical gained 1.6 percent, extending this year’s gain to 11 percent. Cipla Ltd. added 2 percent. Lupin Ltd. climbed 1 percent, taking this year’s rally to 32 percent, the most among the 30 Sensex companies.
Housing Development Finance Corp. soared 3.2 percent, the most since May 11. Tata Consultancy gained 1.4 percent. Maruti Suzuki added 2.6 percent, the most since June 1.
International investors sold a net $39.5 million of Indian stocks on July 9, paring this year’s inflows to $6.8 billion.
The Sensex has risen 1.7 percent this year and trades at 15.6 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.5.