Indian Stocks Rise a Second Day; Commodity Producers Advance

India’s stocks rose for a second day, led by commodity producers after oil and metal prices climbed. Reliance Industries Ltd. gained after the country’s biggest publicly traded company said it’s buying bankrupt chemicals and fuels maker LyondellBasell Industries AF.

Reliance Industries, which has the biggest weighting in the index, added 3.4 percent after bidding an undisclosed amount of cash to buy LyondellBasell Industries AF. Oil & Natural Gas Corp., India’s largest producer of the fuels, climbed 1.5 percent to 1,186.45 rupees, while Sterlite Industries (India) Ltd., the nation’s biggest copper producer, increased 1.6 percent to 871.70 rupees.

“We aren’t seeing a bubble yet in commodities,” said Deven Choksey, chief executive officer of K.R. Choksey Shares & Securities, who manages about $118 million for wealthy individuals. “We have already seen some oil refining capacities close down, if that continues we will see a demand-supply mismatch.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, advanced 158.33, or 0.9 percent, to 17,180.18. The S&P CNX Nifty Index on the National Stock Exchange climbed 1 percent to 5,103.55. The BSE 200 Index added 0.8 percent to 2,129.88.

Copper for delivery in three months on the London Metal Exchange gained 2.4 percent to $6,970 a metric ton at 9:45 a.m. in London. Crude oil rose from a one-week low on speculation demand will increase as the global economy recovers. Crude oil for January delivery rose as much as $1.05, or 1.4 percent, to $78.52 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Access to U.S.

Reliance rose 3.4 percent to 2,194.95 rupees. The owner of the world’s largest oil-refining complex may pay as much as $12 billion for bankrupt LyondellBasell, Victor Shum, an analyst at Purvin & Gertz Inc. said. The purchase would give Reliance access to the U.S. fuel market, the world’s biggest, and make it the largest producer of polypropylene used in refrigerator casings.

“We believe this deal would give Reliance access to LyondellBasell’s distribution network in Europe and U.S. regions and also presence in the Middle East through LyondellBasell upcoming low-cost olefin capacities,” Nilesh Banerjee, an analyst at Goldman Sachs Group Inc. said in a note to clients today. “It also will likely allow Reliance greater bargaining power in procurement and sales.”

‘Bad Phase’

Bharti Airtel Ltd. led declines in phone operators on concern low transaction fees for mobile number portability will increase retention costs for phone companies. The phone regulator has set the price for number portability at 19 rupees, according to a statement on Nov. 20.

“The telecom sector is going through a bad phase, first with the price competition and now the number portability” said Jayesh Shroff, who helps manage $7 billion in assets at SBI Asset Management Co. in Mumbai. “The number portability fee being set so low will result in customers resorting to switching between service providers.”

Bharti, India’s largest mobile phone operator, fell 4.7 percent to 275.25 rupees. Reliance Communications Ltd. declined 0.9 percent to 172.25 rupees. Idea Cellular Ltd. slid 3.3 percent to 49.35 rupees.

Ashapura Minechem Ltd. (ASMN IN) advanced by 5.1 percent to 53.55 rupees. The miner can resume the sale and export of bauxite from the western state of Gujarat, it said in a filing to the Bombay Stock Exchange on Nov. 21. The resumption is likely to have a “positive impact” on the company’s performance this fiscal year, it said.

Essar Oil Ltd. (ESOIL IN) gained 2.1 percent to 139.65 rupees. Royal Dutch Shell Plc is in talks to acquire a 10 percent stake in Essar Oil, the Economic Times reported on Nov. 21 citing people it didn’t identify. Shell will buy the stake, valued at about $364 million, as part payment for selling three of its European refineries to Essar, the newspaper said.

Patni Computer Systems Ltd. (PATNI IN) added 5.2 percent to 466.55 rupees. The Patni brothers and General Atlantic have agreed to sell their stakes in the software service provider, the Business Standard reported, citing investment banking officials it didn’t identify.