Indian stocks rose in thin trading, with automobile and pharmaceutical companies helping the benchmark index extend a second week of advances.
Tata Motors Ltd., owner of the Jaguar Land Rover brand of luxury vehicles, rallied the most in a month, while Maruti Suzuki India Ltd., the biggest gainer this year on the S&P BSE Sensex, increased from a two-week low. Dr. Reddy’s Laboratories Ltd. was the best performer on the 30-stock gauge, while Sun Pharmaceutical Industries Ltd., the most valuable drugmaker, climbed to a seven-week high. NTPC Ltd., the largest power producer, climbed for an eighth day, its longest streak since April 2013.
The Sensex and the Nifty 50 Index each added 0.8 percent at the close in Mumbai, after rising 1.3 percent last week. Trading volumes in Nifty stocks were 13 percent below the 30-day average. Overseas investors have been net buyers of local equities over the past two weeks, trimming this month’s outflow to $303 million.
“Foreign funds are back and this is giving some comfort,” Chokkalingam G., managing director at Mumbai-based Equinomics Research & Advisory Pvt., said by phone. “We are very hopeful that 2016 will be a better year for Indian equities. We are advising investors to focus on mid-caps and small-caps” in the sugar, pharmaceutical and information-technology industries, he said.
Tata Motors surged 3 percent, the most since Nov. 26. The stock has rallied 32 percent in the current quarter, paring its annual loss to 20 percent. Maruti Suzuki added 0.9 percent, increasing this year’s advance to 39 percent, following an 89 percent surge in 2014.
Dr. Reddy’s Laboratories jumped 3.7 percent, while Sun Pharma gained 2.6 percent to its highest level since Nov. 5. NTPC advanced 3.3 percent to its highest level since May 11.
The Sensex, which has fallen 5.3 percent so far this year, trades at 15.6 times its projected 12-month earnings, compared with a multiple of 11.1 for the MSCI Emerging Markets Index.