Indian equities advanced for a second day amid optimism trade ties with China will attract foreign inflows and revive economic growth.

Sun Pharmaceutical Industries Ltd. (SUNP) gained the most in two weeks after agreeing to buy from Merck & Co. global rights for tildrakizumab used to treat a skin disease. Hero MotoCorp Ltd. (HMCL) advanced to a record after Chief Executive Officer Pawan Munjal said India’s largest motorcycle maker will enter the U.S. and Europe by 2016. Engineering company Larsen & Toubro Ltd. (LT) added 2.4 percent in a second day of advance.

The S&P BSE Sensex (SENSEX) climbed 1.2 percent to 26,940.72 at 11:51 a.m. in Mumbai. Prime Minister Narendra Modi will host Chinese President Xi Jinping for talks in New Delhi after the two leaders witnessed the signing of more than $ 3.4 billion in agreements yesterday. China is likely to invest $ 100 billion in India over the next five years, the Economic Times newspaper reported, citing no one.

“The government is showing aggressiveness in boosting trade and money is coming in from Japan and China, and we expect more money from the U.S.,” Jitendra Panda, managing director and chief executive officer at Peerless Securities Ltd., said by phone today. “Bulk of this money is coming in manufacturing, engineering and power projects, which will be a long-term growth booster.”

Modi is seeking Chinese support for his efforts to revive an economy growing at close to the slowest pace in a decade, and to resolve a long-running border dispute. Modi met Japanese Prime Minister Shinzo Abe in Tokyo earlier this month and will visit President Barack Obama at the White House two weeks from now. Abe offered 50 billion yen ($ 480 million) in infrastructure loans and pledged 3.5 trillion yen of public and private investment and financing over five years.

Drugmakers Rally

Sun Pharmaceutical increased 2.3 percent, the second-best performance on the Sensex. Dr. Reddy’s Laboratories Ltd. (DRRD) jumped 2.5 percent to a record, while Cipla Ltd. added 1.5 percent.

Hero MotoCorp rallied 2.5 percent, taking the year’s gains to 40 percent. Larsen added 2.4 percent.

The Sensex has increased 27 percent this year, the best performer among the world’s top 10 stock markets, as foreign investors poured $ 14.1 billion into the nation’s equities. The gauge trades at 15.6 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.2.

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

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