India’s Sensex Climbs Most in Asia as ONGC Paces Energy Stocks

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Indian stocks jumped, with the benchmark index rebounding from a three-month low, as energy companies rallied and auto companies posted an increase in April sales.

Oil & Natural Gas Corp. surged the most in 11 months amid speculation the government will exempt the state explorer from bearing the burden of cooking-gas subsidies for the fiscal year started April 1. Bajaj Auto Ltd. jumped the most since May 2009 after posting record commercial vehicles sales for the month of April. Maruti Suzuki India Ltd. added 0.9 percent after posting a 27 percent gain in dispatches. Cipla Ltd., a drugmaker, had the steepest climb in seven months.

The S&P BSE Sensex rallied 1.8 percent to 27,490.59 at the close, the most since March 30. The gauge decreased 3.4 percent in April as concern earnings growth will slow spurred capital outflows for six days through April 29. The loss dragged down the gauge’s valuations to 15 times projected 12-month earnings on April 29, the cheapest in four months.

“Stocks rebounded on value buying,” Shishir Bajpai, a director at IIFL Wealth Management Ltd., said by phone from Mumbai. “A mix of good auto numbers and speculation of the cooking-gas subsidy being scrapped led to short covering.”

Oil & Natural Gas soared 8 percent to 328.35 rupees, while Oil India Ltd. surged 6.5 percent, the biggest jump in almost a year. The government caps the price of cooking fuels to shield the poor. The difference between the cost and the retail price is borne by the government by way of cash subsidy and explorers like ONGC and Oil India.

“Today’s surge was a combination of higher crude prices and possible exemption from sharing of the subsidy burden,” Dhaval Joshi, an analyst at Emkay Global Financial Services Ltd., said by phone from Mumbai.

Bajaj Sales

Bajaj Auto rallied 7.2 percent, the most since May 2009. The stock fell 3.4 percent in April, its fifth straight month of declines. The company sold 50,483 commercial vehicles in April, up 58 percent from a year earlier. Maruti’s local sales increased to 100,709 units.

The benchmark gauge of Indian option prices advanced for the first time in five days after foreigners sold stocks for a sixth day amid concern earnings growth will slow. The India VIX Index added 0.5 percent to 17.30 after rising 19 percent in April, data compiled by Bloomberg show.

The CNX Nifty Index jumped 1.8 percent to 8,331.95 on the first day of May derivatives series. The index dropped 3.7 percent in April, its second monthly retreat.

Global investors pulled $611 million from Indian shares last week, the biggest weekly outflow in 2015. That pared this year’s inflows to $7.7 billion. They purchased $16 billion of stocks last year.

The Sensex has dropped 0.5 percent this year and trades at 15.2 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 12.5 times.