Indian stocks advanced, with the benchmark index headed for its longest run of monthly gains in more than seven years, as the central bank maintained interest rates for a fourth meeting.
Larsen & Toubro Ltd. (LT), India largest engineering company, increased to a one-week high after winning an order. Housing Development Finance Corp. (HDFC) rose the most in two weeks. Ceat Ltd. surged to a record, leading tiremakers higher as declining rubber prices improved the outlook for earnings.
The S&P BSE Sensex (SENSEX) added 0.8 percent to 26,796.56 at 1:01 p.m. in Mumbai. The gauge had fallen 2.6 percent from a record reached on Sept. 8 through yesterday. The Reserve Bank of India kept the main rate at 8 percent, continuing a fight against Asia’s fastest inflation as Prime Minister Narendra Modi takes steps to revive the manufacturing sector.
“Investors who had missed the rally are getting back at every dip,” Chokkalingam G., managing director at Equinomics Research in Mumbai, said by phone. “People were waiting for the RBI policy, and the decision was on expected lines.”
The Sensex has risen every month since January as foreign investors poured $ 13.8 billion into local shares this year, the most among eight Asian markets. The seven-month rally is the best performance since January 2007. The gauge is the top performer among the world’s 10 biggest markets in 2014, data compiled by Bloomberg show.
The RBI’s decision was predicted by all 51 economists in a Bloomberg survey. Governor Raghuram Rajan joins counterparts from Russia and Brazil in holding interest rates this month as he seeks to cool price pressures to lay the foundation for sustainable economic growth. Standard & Poor’s said it expects Modi to implement growth-enhancing policies in raising India’s outlook last week, and that better deficit or inflation metrics could trigger a rating boost.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Phani Varahabhotla