India’s benchmark stock-index rose, led by lenders and industrials, amid speculation Prime Minister Narendra Modi will accelerate policy changes to boost growth.
ICICI Bank Ltd. (ICICIBC) rose to a record. Larsen & Toubro Ltd. (LT), the nation’s biggest engineering company, climbed to a six-week high. Indian Hotels Co., owner of the Taj brand of luxury hotels, headed for the highest level in three months. Sun Pharmaceutical Industries Ltd. (SUNP) rose the most in three weeks.
The S&P BSE Sensex (SENSEX) added 0.3 percent to 26,821.05 at 10:22 a.m. in Mumbai. The gauge rallied to a one-month high last week as Modi ended diesel subsidies and raised natural-gas tariffs. His Bharatiya Janata Party came first in two state elections, fueling optimism the victories may make it easier to push ahead with tougher measures to boost growth. Those include further opening up to foreign investment and a goods-and-services tax.
“We expect the government to pass important legislations like the GST and insurance in the winter session” of the parliament, Samir Arora, Singapore-based founder of hedge-fund firm Helios Capital Management Pte., told Bloomberg TV India today. “It is a good period for India.”
State elections are important for control of the upper house of parliament, where representation is based on seats in local assemblies. While the BJP controls the lower house, or Lok Sabha, after winning the strongest mandate in 30 years, it holds about 18 percent of the Rajya Sabha. The government needs votes in both chambers of parliament to pass the tax law, which would replace more than a dozen types of existing taxes, and the support of 15 of the 29 states to amend the constitution.
Foreign investors bought a net $ 21.1 million of domestic stocks on Oct. 22, taking this year’s inflows to $ 13.3 billion, the most among eight Asian markets tracked by Bloomberg.
The Sensex has increased 27 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.3 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.6.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Phani Varahabhotla