India’s Benchmark Stock Index Rises; Tata Steel Leads Gains

Aug. 20 (Bloomberg) -- India’s benchmark stock index rose as metal prices rallied after equities rebounded in Asia, easing doubts about a global economic recovery.

Tata Steel Ltd., the biggest producer of the alloy, rose 2.3 percent. Hindalco Industries Ltd., the biggest aluminum producer, gained 3.5 percent.

“All indicators are showing that the Indian economy is recovering,” said Krish Shanbhag, the head of research at Antique Stock Broking Ltd. in Mumbai. “Investors should look at the long term and keep investing in the markets.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 255.92, or 1.7 percent, to 15,065.56 at 10:36 a.m. The S&P CNX Nifty Index on the National Stock Exchange gained 1.8 percent to 4,471.55. The BSE 200 Index advanced 1.6 percent to 1,844.58.

Tata Steel rose 2.3 percent to 443.8 rupees. Hindalco Industries gained 3.5 percent to 106.3 rupees. Infosys Technologies Ltd., the second-largest software services provider, added 2 percent to 1,990.15 rupees after it said it is pursuing 10 to 12 government projects to raise its revenue from India.

Three-month delivery copper climbed as much as 2 percent to $6,101 a metric ton on the London Metal Exchange and traded at $6,068 a ton in Singapore. The contract dropped to the lowest since Aug. 3 yesterday.

Among other LME-traded metals, aluminum added 0.6 percent to $1,962 a ton, zinc rose 1.2 percent to $1,830 a ton, lead increased 0.7 percent to $1,825 and nickel climbed 2 percent to $19,220 a ton.

Asia, Metals

Asian stocks gained, led by energy and finance companies, as oil prices rallied.

The MSCI Asia Pacific Index added 0.6 percent to 110.99 in Tokyo. The gauge has advanced 57 percent from a more than five- year low on March 9 amid speculation the global economy is recovering. A measure of energy stocks on the index rose 2.4 percent, the best performer among 10 industry groups. The finance sub-index rose 1.4 percent, the second-placed grouping.

Japan’s Nikkei 225 Stock Average advanced 0.7 percent to 10,279.19. Australia’s S&P/ASX 200 Index gained 0.4 percent, while South Korea’s Kospi Index added 0.7 percent.

Adani Power advanced 2.1 percent to 102.05 rupees on its first day of trading after raising 30.3 billion rupees ($622 million) in an initial public offering.

“The response to the recent initial public offerings shows the risk appetite of investors is back,” said Shanbhag.

Avoiding Sell-Off

Utilities including Tata Power Co. and Indiabulls Power Ltd. plan to tap appetite for power shares after the Sensex headed for its best year in six, gaining 56 percent. Investors are betting energy demand will continue to climb as the government invests in electricity generation in a nation where the peak power deficit may rise to 12.6 percent.

Indian stocks will avoid a sell-off that briefly pushed China into a bear market as the South Asian nation is poised to topple its neighbor as the world’s fastest growing economy, according to ICICI Prudential Life Insurance Co.

“India’s economy will grow faster than China’s next year,” Puneet Nanda, executive vice president at ICICI Prudential, the country’s largest private insurer with $6 billion in equities, said in an interview in Mumbai yesterday. “Industrial and services sectors will grow far more rapidly than expected.”

India’s economy may expand this year at a faster pace than earlier forecast as business confidence rebounds, buoyed by government stimulus and record low borrowing costs, the central bank said July 27. China’s benchmark stock index yesterday briefly entered into a so-called bear market from its high this year on concern economic growth will falter as banks rein in lending. A decline of 20 percent signals a bear market.