Dec. 2 （Bloomberg） -- India’s stocks rose for the fourth day, taking the benchmark index to its highest level in more than two weeks, amid expectations a strengthening global economic recovery will boost local earnings.
Oil & Natural Gas Corp., the state-owned oil explorer, jumped 2.2 percent after the government approved splitting its shares. Hindalco Industries Ltd., the aluminum producer that controls the U.S.-based Novelis Inc., climbed 2.4 percent, leading gains among commodity companies as metal prices rallied after reports showed U.S. payrolls and manufacturing climbed.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 142.7, or 0.7 percent, to 19,992.7 as of the 3:30 p.m. close in Mumbai, capping its longest stretch of gains since Sept. 15. The S&P CNX Nifty Index on the National Stock Exchange rose 0.9 percent to 6,011.7. The BSE 200 Index increased 0.7 percent to 2,516.19.
“Support has come in the form of positive economic data from the U.S. and domestic economic growth,” said Sadanand Shetty, a Mumbai-based senior fund manager at Taurus Asset Management Co., which manages about $665 million. “The recent drop in stocks was pretty swift and sharp.” The Sensex completed a third-straight week of losses on Nov. 26, roiled by corruption scandals. Shetty said he owns shares of Oil & Natural Gas and ICICI Bank Ltd., the second-largest lender.
Regional Rally
Asian stocks climbed, sending the region’s benchmark index to its biggest rally in a month, while commodities rose amid signs the global recovery is strengthening.
Metal prices rallied as confidence that demand will increase was bolstered after ADP Employer Services reported greater-than-forecast growth in U.S. private employment, while the Institute for Supply Management’s index showed U.S. manufacturing expanded for a 16th month in November.
Sterlite Industries （India） Ltd., the No. 1 copper and zinc producer, rose 3.4 percent to 169.8 rupees, the most in a month. Hindalco climbed 2.4 percent to 218.75 rupees, its highest close in two weeks.
Copper advanced in London after manufacturing in China, the U.S. and Europe expanded, adding to signs of a revival in demand. Zinc for three-month delivery rose 3.2 percent on the London Metal Exchange.
Growth Outlook
India’s economy grew 8.9 percent for a second straight quarter in July to September, a government report showed Nov. 30. A measure of India’s manufacturing output stood at 58.4 in November, according to the Purchasing Managers’ Index compiled by HSBC Holdings Plc and Markit Economics yesterday. A reading over 50 indicates expansion. The gauge was at 57.2 in October.
“The numbers, from India and around the world, have been all positive,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “It will boost investor confidence.” Mathews advises investors to buy shares of Oil & Natural, ICICI Bank, Housing Development Finance Corp. and HDFC Bank Ltd
Oil & Natural climbed 2.2 percent to 1,313.95 rupees, advancing for a fifth day.
Power companies including Lanco Infratech Ltd. and Power Grid Corp. rose after they were rated “buy” in new coverage by Nomura Holdings Inc., which said in a note that they are “bullish” on the industry given the outlook for growth.
Lanco gained 1.8 percent to 63.55 rupees, its highest close since Nov. 24. Power Grid advanced 2.2 percent to 99 rupees, the most in more than three weeks.
Foreign fund inflows have almost doubled this year to an all-time high on the expectation consumer spending will boost corporate earnings.
Overseas investors purchased a net 11.9 billion rupees （$258.6 million） of Indian shares on Nov. 30, taking this year’s record inflows to 1.324 trillion rupees, according to data on the website of the Securities and Exchange Board of India.
--Editors: Margo Towie, Ravil Shirodkar
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