Indian stocks rose to a record, led by lenders and drugmakers, as quarterly earnings at some of the nation’s biggest companies exceeded forecasts and data showed foreigners boosted their holdings of local shares.

State Bank of India rallied to a 3 1/2-year high, sending a gauge of lenders to an all-time high. Sun Pharmaceutical Industries Ltd. (SUNP), the largest drugmaker by market value, rose to a record. Hindustan Unilever Ltd. (HUVR), the biggest home-products maker, gained for a fifth day, the longest run in three months.

The S&P BSE Sensex (SENSEX) added 0.4 percent to 27,974.05 at 10:53 a.m. in Mumbai, extending last month’s rally, the biggest since June. About 79 percent of index members that have posted results so far have beaten or matched estimates, compared with 46 percent in the June quarter and 60 percent in the previous three months, data compiled by Bloomberg show. Global investors bought $ 311 million of shares on Oct. 11, the most in 11 weeks. Indian markets were closed yesterday for a holiday.

“The quality of earnings this quarter has been better,” Pankaj Pandey, the head of research at ICICIdirect.com, a unit of India’s second-biggest lender, said in an interview today to Bloomberg TV India. “Market momentum will be sustained.”

The Sensex jumped 4.6 percent in October amid optimism Prime Narendra Modi will speed up reforms to spur growth. The gains been aided by speculation the Reserve Bank of India may cut interest rates as lower energy costs cool inflation in a nation that imports almost 80 percent of its oil.

Brent crude has dropped about 4 percent this month, and 26 percent since June to $ 82.57 a barrel. Governor Raghuram Rajan has kept the benchmark repurchase rate at 8 percent after three increases from September 2013 through January.

Lenders Rally

State Bank jumped 2.4 percent to its highest level since April 2011. ICICI Bank Ltd. (ICICIBC) and HDFC Bank Ltd. (HDFCB), the country’s largest lender by market value, rallied to records.

Sun Pharma gained 1.6 percent, extending this year’s rally to 53 percent. Ranbaxy Laboratories Ltd. (RBXY) climbed 1.6 percent.

Hindustan Unilever added 0.9 percent, while ITC Ltd. (ITC), the nation’s biggest cigarette company, climbed 0.8 percent.

The Sensex has risen 32 percent in 2014, the top performer among the world’s 30 biggest markets, as foreigners plowed $ 14 billion into the nation’s equities, the most among eight Asian markets tracked by Bloomberg. The gauge is valued at 15.9 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 11, the data show.

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