India’s Sensex Climbs Most in a Week as Power Utilities Advance

Indian stocks climbed, sending the benchmark index up most in a week, as traders closed bets amid expiry of monthly derivatives contracts today.

Bharat Heavy Electricals Ltd. surged to a five-month high, pushing up a measure of capital goods companies to a fourth day of gains. Tata Power Co. jumped 4.2 percent, driving up the S&P BSE India Power Index to a three-week high. HDFC Bank Ltd. was the third-best performer on the S&P BSE Sensex today.

The Sensex advanced 0.2 percent to 21,074.59 at the close, the most since Dec. 20, paring an intraday gain of 0.5 percent. Volume on the CNX Nifty Index was 6 percent above the 30-day average, while rollovers in Nifty futures were about 60 percent yesterday, compared with the 62 percent average of the previous three series on day before settlement. Derivatives contracts in India expire on the last Thursday of every month.

“Weak rollover figure indicates lower participation of investors during the holiday season,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from Kollam. “Fresh buying interest may emerge only in the new year.”

Bharat Heavy increased 1.1 percent to 174.8 rupees, the highest level since July 18. Tata Power jumped the most since Dec. 6 to 89.9 rupees, the best performer on the Sensex. Adani Power Ltd. added 3.1 percent, the second-best performer on the S&P BSE India Power Index. CESC Ltd. surged 3.2 percent to the highest level since January 2010.

HDFC Bank surged to a one-week high. Axis Bank Ltd. jumped the most in two weeks after the economic affairs secretary Arvind Mayaram said that the government is considering selling a stake in the lender. The government also today approved a plan to raise the lender’s foreign investment limit. The S&P BSE Bankex rose 0.5 percent to the highest level since Dec. 12.

‘Stalled Projects’

“Traders covered short positions in power companies and banks on speculation the government may clear stalled projects in the sector,” said Deven Choksey, managing director of K.R. Choksey Shares & Securities Pvt. in Mumbai. “Banks, too, will benefit as provisioning for stalled power projects will be off their books once the ventures are cleared.”

State-owned Oil & Natural Gas Corp. increased 1.5 percent while Sesa Sterlite Ltd. added 1.3 percent. Sun Pharmaceutical Industries Ltd., the most valuable drugmaker, rose 0.5 percent, halting three days of losses. The stock has rallied 55 percent this year, the third-best performer on the Sensex during the period.

Fund Inflows

The Sensex has risen 8.5 percent this year, beating stocks in Brazil, Russia and China, as growing exports boosted company profits and the U.S. Federal Reserve’s stimulus program spurred foreigners to pour a net $19.7 billion into the nation’s equity market, the most in Asia after Japan. The measure climbed to a record on Dec. 9.

Software exporter Tata Consultancy Services Ltd. rallied 67 percent this year, the most among Sensex stocks. State Bank of India tumbled 26 percent, the worst-performer on the index.

The Sensex trades at 13.5 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.4 times, data compiled by Bloomberg show.

Foreigners have bought a net $800 million of local stocks since the Reserve Bank of India unexpectedly kept its benchmark interest rate unchanged on Dec. 18. RBI Governor Raghuram Rajan said the authority needs more clarity on economic data before deciding whether to raise rates amid accelerating consumer prices and the slowest economic growth in more than a decade.

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