Indian Stocks Cap Best 2013 Gain Among Biggest Emerging Markets

Indian stocks rose, with the benchmark index capping the best annual gain among the four-largest emerging markets, as technology and drug stocks rallied on speculation overseas demand will improve.

Dr Reddy’s Laboratories Ltd. led a gauge of health-care companies to a 0.2 percent gain. Tata Consultancy Services Ltd., the country’s largest software exporter, rose 0.7 percent to extend its best annual performance in four years. Apollo Tyres Ltd. climbed to a record after Cooper Tire & Rubber Co. said it’s dropping plans to be bought by the Indian company.

The S&P BSE Sensex rose 0.1 percent to 21,170.68, extending 2013’s increase to 9 percent. Indian drugmakers and technology companies, which get most of their sales from abroad, posted the five-largest gains on the Sensex in the year as growth in developed economies and an 11 percent decline in the rupee boosted the outlook for exporters. The Conference Board’s gauge of U.S. consumer sentiment probably climbed to a three-month high in December, economists said before data today.

“Hopes of a faster U.S. economic revival are fueling a rally in drug and software exporters,” Anita Gandhi, executive director at Arihant Capital Markets Ltd. in Mumbai, said by phone. “Funds are buying to boost their portfolios before the year end.”

The Sensex’s advance this year compares with a 1.9 percent gain in Russia’s Micex Index, a 6.8 percent drop in the Shanghai Composite Index and a 16 percent retreat in Brazil’s Ibovespa. The Indian gauge trades at 13.6 times projected earnings for the next 12 months, compared with the MSCI Emerging Markets Index’s 10.5 times, data compiled by Bloomberg show.

Drugmakers Gain

Tata Consultancy, which has rallied 73 percent this year for the biggest gain among Sensex stocks, advanced to a two-month high. Rival Wipro Ltd., the second-best performer in the index, rose 1.4 percent.

Dr Reddy’s increased 0.4 percent to a one-week high. Cipla Ltd. added 0.2 percent. The S&P BSE Healthcare Index extended this year’s advance to 23 percent.

State Bank of India rose 0.1 percent, paring a 26 percent loss this year, the worst-performance on the Sensex. Power equipment maker Bharat Heavy Electricals Ltd. slid 23 percent in 2013 for the second-biggest loss.

The Sensex will probably climb to 23,200 next year, about 9.6 percent higher than today’s close, according to the average of eight analysts’ predictions compiled by Bloomberg.

Global investors bought a net $20.8 million of local shares on Dec. 30, taking inflows in 2013 to $20.1 billion, the most in Asia after Japan, data from the market regulator show. Net purchases in 2012 were $24.6 billion, data compiled by Bloomberg show.

The CNX Nifty Index on the National Stock Exchange of India Ltd. advanced 0.2 percent to 6,304.

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