Indian (SENSEX) stocks advanced for the first time in four days amid speculation falling oil prices will curb inflation after Iran agreed to limit its nuclear program in exchange for relief from some sanctions.

Indian Oil Corp., the nation’s biggest state-run refiner, climbed the most in a week, pacing gains among its peers. Oil & Natural Gas Corp. (ONGC), the largest state-owned oil explorer, rose to a three-week high. Axis Bank Ltd. (AXSB) ended a four-day decline on plan to add the lender to the benchmark stock index.

The S&P BSE Sensex jumped 1.5 percent to 20,513.32 at 9:58 a.m. in Mumbai. The gauge slid 0.9 percent last week. Lower oil costs help cut import costs for a country that imports about 80 percent of its crude. The Reserve Bank of India raised its main interest rate last month to fight inflation and is scheduled to review borrowing costs on Dec. 18.

“Falling oil prices will give the RBI room to reverse the current monetary tightening,” Rajendra Wadher, director at PRB Securities Ltd., said by phone. “Lower interest rates will boost capital investments and support stocks.”

Brent crude slumped from a six-week high, losing as much as 2.5 percent. The lifting of a European Union ban on insuring tankers carrying Iranian crude as part of a nuclear deal reached in Geneva yesterday will ease the process of importing the Persian Gulf state’s oil, according to Indian refiners.

The end of the EU ban is part of a first-step agreement that will give Iran as much as $ 7 billion in relief from economic sanctions over six months. The deal will help ease some sanctions on oil, auto parts and gold.

The Sensex has gained 5.6 percent this year, the largest increase among the four biggest emerging markets, and trades at 13.4 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.5 times.

Global investors sold a net $ 6.4 million of local shares on Nov. 21, snapping the longest run of consecutive purchases since Feb. 15, according to data from the market regulator.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at; Santanu Chakraborty in Mumbai at

To contact the editor responsible for this story: Michael Patterson at