Indian Stocks Rise to 28-Month High in Special Trading Session

Indian stocks climbed to the highest level in more than two years in a special trading session in Mumbai today.

The S&P BSE Sensex gained 0.2 percent to 20,122.32 at the close in Mumbai, the highest level since Jan. 6, 2011. Volumes were 21 percent below the 30-day average. Drugmaker Dr. Reddy’s Laboratories Ltd. rallied to a record. Sterlite Industries (India) Ltd., the nation’s top copper producer, advanced for the first time in three days.

BSE Ltd., Asia’s oldest bourse, held the 90-minute session to test its disaster management and recovery measures. The National Stock Exchange of India Ltd., the nation’s biggest, and MCX Stock Exchange Ltd. were also open.

Foreigners have bought a net $12.5 billion of domestic shares this year, a record for the period, data from the market regulator show. Factory output in March expanded at the fastest pace in five months after the central bank cut borrowing costs three times this year to help revive an economy that expanded at the weakest pace in a decade last year, data showed yesterday.

“The ongoing rally has been boosted by foreign inflows and easy global liquidity conditions,” Kishor Ostwal, managing director of CNI Research (India) Ltd., said by phone today. “The mood continues to be upbeat. A revival in industrial production and rate cuts by the RBI is supporting the markets. Plus, the earnings season has been better-than-expected.”

India’s industrial production climbed 2.5 percent from a year ago after a revised 0.5 percent gain in February, official data showed yesterday. The median of 26 estimates in a Bloomberg survey was for a 2.4 percent gain. The central bank forecasts economic growth will accelerate to 5.7 percent in the fiscal year through March 2014, compared with the baseline projection of 5.5 percent for the previous 12 months.

Earnings Scorecard

Profits at just two of the 14 Sensex companies that have reported March-quarter earnings have trailed estimates, data compiled by Bloomberg show. That compares with about 43 percent that missed forecasts in the three months ended Dec. 31, and 40 percent in the previous two quarters.

Dr. Reddy’s Laboratories soared 3.4 percent to a record 2,091.7 rupees. Sterlite Industries increased 1.4 percent to 97.8 rupees. Coal India Ltd., the nation’s biggest producer of the commodity, rose 1.3 percent to 303.65 rupees.

The Sensex rallied 10.4 percent from a seven-month low from April 9 as foreign funds extended purchases amid monetary easing by central banks. The gauge is valued at 13.91 times forecast 12-month profits, the highest reading since Oct. 10, compared with the MSCI Emerging Markets Index’s 10.6 times.

Today’s advance on the Sensex extended the weekly gain to 2.8 percent, the longest stretch since the five-week rally that ended on Oct. 5. The 50-stock CNX Nifty Index increased 0.2 percent to close at 6,107.25, its highest level since Jan. 4, 2011. Volume on the Nifty was 92 percent below the 30-day average. India VIX, which gauges the cost of protection against losses in the Nifty, fell 0.1 percent to 16.84.

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