Indian stocks climbed for a third day after Prime Minister Narendra Modi implemented his biggest energy-policy reforms since taking office in May.

Gail India Ltd. (GAIL), India’s largest natural-gas distributor, jumped to a three-year high. Sesa Sterlite Ltd., the biggest copper and aluminum producer, gained the most in four months. ICICI Bank Ltd. (ICICIBC) led a gauge of lenders to a record high. The Sensex rose 0.5 percent to 26,571.21 as of 11:18 a.m. in Mumbai.

The government approved after markets closed yesterday a decree enabling it to permit commercial coal mining, paving the way for the auction of mining licenses and an end to a four-decade-old state monopoly on mining and selling the fuel. The move came after Modi freed diesel from price controls and increased natural-gas tariffs over the weekend to curb subsidies and cut the fiscal deficit.

“What they have done has been great, it exceeded my expectations,” Mark Matthews, the Singapore-based head of Asia research at Bank Julius Baer & Co., said in an interview to Bloomberg TV India today. “The collapse in oil price and continued weakness in gold price is a great boon to India. There is a great governor at the Reserve Bank of India and the prime minister is pro-business and can-do guy and he controls 62 percent of parliament. The stars are aligned in India’s favor.”

Brent crude, a benchmark for half the world’s oil including India’s, has declined 20 percent this year. Gold prices have tumbled 28 percent in the past two years. India imports about 80 percent of its oil requirements and is the world’s largest buyer of gold after China.


Gail India surged 4.4 percent, poised for its highest level since April 2011. Sesa Sterlite climbed 5 percent, the most since June 5, and was the biggest gainer on the Sensex. (SENSEX)

ICICI Bank Ltd. advanced 2 percent to a four-week high and helped push the S&P BSE India Bankex index 1.3 percent higher toward an all-time closing high.

HDFC Bank Ltd. (HDFCB), India’s most valuable lender, climbed 0.9 percent. The company may report today that profit for the quarter ended September rose 22 percent from a year earlier to 24.2 billion rupees ($ 394 million), according to the median estimate of 35 analysts in a Bloomberg survey.

International investors sold a net $ 227 million of Indian stocks on Oct. 17, paring this year’s inflows to $ 13 billion, still the most among eight Asian markets tracked by Bloomberg.

The Sensex has advanced 26 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.2 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.6.

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To contact the editors responsible for this story: Richard Frost at Phani Varahabhotla, Matthew Oakley