Sensex Climbs to Five-Week High as Indian June Futures Expire

Indian stocks climbed, sending the benchmark equity index to its highest level in five weeks, as motorcycle makers and financial companies advanced amid the expiration of monthly derivative contracts.

Bajaj Auto Ltd., the top gainer on the S&P BSE Sensex, rose to its highest level in six months. Larsen & Toubro Ltd., the largest engineering company, rallied the most in two months after Prime Minister Narendra Modi announced measures to upgrade infrastructure in cities. Housing Development Finance Corp., the biggest mortgage lender, advanced to an 11-week high.

The S&P BSE Sensex rose 0.6 percent to 27,895.97 in Mumbai, its highest close since May 22, capping its ninth advance in 10 days. The gauge has climbed 5.8 percent since June 11 from near a seven-month low amid optimism the progress of monsoon rains will help check food prices and give the Reserve Bank of India more room to cut borrowing costs.

“The spread of the monsoon has been very good and that must have forced some investors to cover their bearish bets,” R.K. Gupta, New Delhi-based managing director of Taurus Asset Management Co., which has $650 million in assets, said by phone. “The market appears to be in a positive frame.”

The advance came as equity derivative contracts for June delivery expired Thursday. Traders rolled over 62 percent of CNX Nifty Index futures for this month as of 5:07 p.m. in Mumbai, the lowest rate this year on the day of expiry, according to data compiled by Bloomberg. Indian equity futures and options expire on the last Thursday of every month.

Bajaj Auto, L&T

Bajaj Auto, India’s most valuable motorcycle maker, jumped

4.7 percent to its highest close since Dec. 23. Housing Development Finance gained 1.9 percent to its highest level since April 7. Reliance Industries Ltd., owner of the world’s largest refining complex, increased 1.4 percent, taking its gains so far this month to 15 percent.

Larsen & Toubro advanced 3.2 percent, the biggest contributor by points to the Sensex’s gains. National Buildings Construction Corp. jumped 9.6 percent, climbing the most since Sept. 18. Hindustan Construction Ltd. rose 6 percent, the most since April 7, while Gammon India Ltd. rallied 5.2 percent.

The Sensex has risen 1.4 percent this year and trades at

15.6 times projected 12-month earnings, compared with a five-year average of 14.4. The MSCI Emerging Markets Index is valued at a multiple of 12.

International investors sold a net $49 million of Indian stocks on Tuesday, June 23, paring this year’s inflows to $6.3 billion.

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