India’s benchmark stock-index rose the most in three weeks, led by industrials and banks, after a gauge of manufacturing output expanded for a seventh month.

Engineering company Larsen & Toubro Ltd. (LT) increased to a record after its fourth-quarter profit beat estimates. State Bank of India jumped 3.7 percent, helping an index of lenders climb the most in two weeks. Reliance Capital Ltd. (RCAPT) surged to a a three-year high, extending last month’s 49 percent rally.

The S&P BSE Sensex (SENSEX) rose 1.6 percent to 24,607.5 at 1:10 p.m. in Mumbai, set for the biggest gain since May 12. India’s Purchasing Managers’ Index climbed to 51.4 in May, the highest reading since February, data released by HSBC Holdings Plc and Markit Economics showed. The Reserve Bank of India will hold the key interest rate at an 18-month high at its policy review tomorrow, according to all 34 economists in a Bloomberg survey.

“Banks and industrials are rising on hopes that the RBI may start cutting rates sooner than expected,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. (GBNP), said by phone. “Positive PMI data has improved sentiments.”

Larsen jumped 6.4 percent, the most since May 19. The BSE Capital Goods Index gained 4.6 percent to the highest level since January 2011. State Bank climbed the most since May 23, sending the Bankex Index up 2.6 percent, the most since May 16.

Reliance Capital Ltd. surged 6.2 percent, the second-best gainer on the MSCI Emerging Markets Index. Bharti Airtel Ltd. (BHARTI) advanced to its highest price in seven months.

The Sensex slid 1.9 percent last week, paring its monthly climb to 8 percent. The gauge has risen 16 percent in 2014 amid expectations the strongest electoral mandate in 30 years will enable Prime Minister Narendra Modi to take measures to revive Asia’s third-biggest economy. Gross domestic product rose 4.6 percent in the March quarter, unchanged from the previous three months, official data showed on May 30.

The CNX Nifty Index on the National Stock Exchange of India Ltd. rose 1.5 percent to 7,340.5.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at

To contact the editors responsible for this story: Michael Patterson at Ravil Shirodkar