India Stocks Rise to 1-Month High as Banks Climb With Drugmakers

India’s benchmark stock-index rose to the highest level in a month, led by lenders and drugmakers, amid speculation Prime Minister Narendra Modi will accelerate policy changes to boost growth.

State Bank of India climbed to a four-month high, sending an industry index to a record. Sun Pharmaceutical Industries Ltd. and Cipla Ltd. were among the three best performers on the S&P BSE Sensex. Snowman Logistics Ltd. paced a rally in shares related to e-commerce after SoftBank Corp. said it will invest $627 million in Indian online retailer

The S&P BSE Sensex added 0.5 percent to 26,880.82 at the close in Mumbai. The gauge rose to a one-month high last week as Modi ended diesel subsidies and raised natural-gas tariffs. His Bharatiya Janata Party came first in two state elections, fueling optimism the victories may make it easier to push ahead with tougher measures to boost growth. Those include further opening up to foreign investment and a goods-and-services tax.

“We expect the government to pass important legislations like the GST and insurance in the winter session” of the parliament, Samir Arora, Singapore-based founder of hedge-fund firm Helios Capital Management Pte., told Bloomberg TV India today. “It is a good period for India.”

State elections are important for control of the upper house of parliament, where representation is based on seats in local assemblies. While the BJP controls the lower house, the Lok Sabha, it holds about 18 percent of the Rajya Sabha. The government needs votes in both chambers to pass the tax law, which will replace more than 12 types of existing taxes, and the support of 15 of the 29 states to amend the constitution.

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State Bank rose to the highest price since July 7, while ICICI Bank advanced to a record 1,601.25 rupees. Tata Power Co. rallied to a six-week high, helping a gauge of utilities to a seventh day of gains, the longest stretch in five months.

Sun Pharmaceutical jumped 4.2 percent, the most since Sept 26, while Cipla climbed to a record. Ranbaxy Laboratories Ltd., which is being acquired by Sun, surged the most in six months after its quarterly profit exceeded analyst estimates.

Larsen & Toubro Ltd., India’s largest engineering company, climbed to a six-week high. Indian Hotels Co., owner of the Taj brand of luxury hotels, increased to a three-month high.

Snowman, backed by investors including Japan’s Mitsubishi Corp., advanced 9.1 percent to 105.8 rupees. The company sold shares in an IPO last month at 47 rupees apiece.

Gateway Distriparks Ltd., which controls 40.4 percent of Snowman, increased to a six-week high. Gati Ltd., a logistics company, surged 8.9 percent to a record.

Foreign investors bought a net $21.1 million of domestic stocks on Oct. 22, taking this year’s inflows to $13.3 billion, the most among eight Asian markets tracked by Bloomberg.

The Sensex has increased 27 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.7.

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