India’s stocks rose for a second day, driving the benchmark index to its 13th weekly advance, as metal producers gained after copper and aluminum prices jumped.
Sterlite Industries, the nation’s biggest copper and zinc producer, added 2.1 per cent, while Hindalco Industries, the largest aluminum maker, climbed 3.5 per cent.
The benchmark index completed the longest weekly winning streak since August 2005 after the Congress party had its biggest election win in two decades. President Pratibha Devisingh Patil said yesterday the government might allow greater overseas investment and inject capital into lenders to stoke economic growth. Fund inflows surged to a one-year high.
“Those who missed the recent rally are chasing the stocks,” said A N Sridhar at Sahara Asset Management in Mumbai. “Markets are fairly valued at the moment, but high liquidity and budget expectations are driving the stocks up,” he said.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, climbed 94.87 points, or 0.6 per cent, to close at 15,103.55. The S&P CNX Nifty Index on the National Stock Exchange added 0.3 per cent to 4,586.90. The BSE 200 Index increased 0.4 per cent to 1,848.04.
The Sensex has advanced 3.3 per cent this week. Indian funds attracted $199 million of inflows in the week ended June 3, a 55-week high, Cambridge, Massachusetts-based research company EPFR Global said in a report dated yesterday.
The Sensex has gained 57 per cent this year, the third-best performer among 90 benchmark indices tracked by Bloomberg worldwide. The index has soared 85 per cent since this year’s low on March 9, on speculation government stimulus spending worldwide will help to end the first global recession since World War II. Shares on the Sensex are valued at 16.1 times their reported earnings, almost double the 8.8 times they fetched in March.
Indian stock valuations may keep “bubbling higher” after a record gain earlier this week as the nation’s election results brightened the outlook for investor sentiment, liquidity and economic growth, UBS AG said on May 20.
Sterlite added 2.1 per cent to Rs 672.35. Hindalco climbed 3.5 per cent to Rs 92.9. National Aluminium Co, India’s second-biggest producer of the metal used to make aircraft and beverage cans, rose 1.3 per cent to Rs 348.20 after it said first-quarter profit will increase from the previous three months, aided by higher production and prices.
Copper and aluminum futures advanced in Shanghai on investors’ optimism that the global recession is easing, while the risk of inflation may be rising. Copper headed for a third weekly gain and aluminum jumped to the highest since November 20.
Larsen & Toubro jumped 4.6 per cent to Rs 1,522.60. India’s biggest engineering company plans to sell its 11.4 per cent stake in Ultratech Cement, according to reports.
Grasim Industries, India’s third-biggest cement producer and a maker of viscose-staple fiber, rose 5.7 per cent to Rs 2,513.35. Grasim holds 50.7 per cent in Ultratech, according to data compiled by Bloomberg.
