India Sensex Index Climbs for Third Day; Hindalco, Mahindra Gain

Dec. 1 （Bloomberg） -- India’s stocks rose for the third day, taking the benchmark index to its highest level in a week, amid expectations domestic spending will boost earnings.

Hindalco Industries Ltd., the biggest aluminum producer, gained the most in two weeks. The main stock gauge may climb 13 percent over the next 12 months, buoyed by profit growth, Citigroup Inc. said today. Mahindra & Mahindra Ltd., the largest maker of sport-utility vehicles, advanced 1.5 percent.

“We are confident about India’s long-term economic growth and the equity markets,” said Tejas Doshi, vice president of equity research at Sushil Financial Services Pvt. in Mumbai. “Economic growth is pretty strong and it has been consistent for the past few quarters.” Doshi is advising investors to buy shares of state-run lenders, consumer goods and infrastructure companies.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 144.36, or 0.7 percent, to 19,665.61 at 10:14 a.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange rose 0.8 percent to 5,909.15. The BSE 200 Index increased 1 percent to 2,476.31.

Hindalco surged 3.4 percent to 213.55 rupees. Its U.S. unit Novelis Inc. said yesterday it intends to raise $4 billion in gross proceeds from one or more offerings of senior notes totaling $2.5 billion and a new $1.5 billion secured term loan facility.

JSW Steel

JSW Steel Ltd., the third-largest producer of the alloy, surged 3.9 percent to 1,172.35 rupees after it was raised to “buy” from “neutral” by Alok Kumar Nemani and Prabhat Awasthi, analysts at Nomura Holdings Inc., who said in a note to investors that value has emerged after a decline in the shares over the past month.

Mahindra advanced 1.5 percent to 777.1 rupees. Tata Motors Ltd., the biggest truckmaker and owner of Jaguar Land Rover, added 1.9 percent to 1,257.95 rupees. Maruti Suzuki India Ltd., the biggest carmaker, rose 1.2 percent to 1,439 rupees. Indian carmakers are scheduled to announce their November sales today.

Gross domestic product climbed 8.9 percent for a second straight quarter in July to September, a government report showed yesterday, with the gains propelled by the manufacturing and services industries. Kaushik Basu, chief economic adviser to the finance ministry, said after the data release that India could achieve a 9 percent annual growth rate sooner than expected.

India’s gross domestic product expansion bucked a slowdown in Asian neighbors from Thailand to Malaysia, where currency appreciation and risks to exports from Europe’s debt crisis and U.S. unemployment have clouded the outlook.

India’s foreign fund inflows have almost doubled this year to an all-time high on the expectation consumer spending will boost corporate earnings.

Overseas investors bought a net 2.72 billion rupees （$59.4 million） of the nation’s shares on Nov. 29, taking this year’s record inflows to 1.312 trillion rupees, according to data on the website of the Securities and Exchange Board of India.

--Editors: Margo Towie, Richard Frost.