Most Indian stocks rose, driving the benchmark stock index to a weekly gain, amid expectations local companies will benefit from strengthening economic growth.
Infosys Technologies Ltd., a software exporter that gets two thirds of its sales from North America, advanced to a one- week high. Better-than-expected data from the U.S. and China this week fueled speculation the global economy is recovering. Suzlon Energy Ltd. dropped to the lowest in a week after Reliance Industries Ltd. denied a report that it planned to buy a stake in the wind-turbine maker.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 16.88, or 0.1 percent, to 18,221.43, paring its weekly advance to 1.2 percent. The gauge swung between gains and losses at least 30 times. The S&P CNX Nifty Index on the National Stock Exchange dropped 0.1 percent to 5,479.40. The BSE 200 Index increased 0.1 percent to 2,345.91. About four shares gained for every three that fell on the indexes.
“There is no doubt about India’s growth,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a Mumbai-based publicly traded equities research provider. “The only concern was over the global recovery, and that’s eased after the latest U.S. data. The overall trend in the stock market is positive.”
Infosys
Infosys rose 0.9 percent to 2,777.45 rupees, its highest close since Aug. 23. Bharti Airtel Ltd., the nation’s largest mobile-phone operator, rose 1.5 percent to 339.25 rupees, a nine-month high. The shares were the best performer on the benchmark stock index this week.
Suzlon Energy dropped 2.4 percent to 50.05 rupees, trimming yesterday’s 10 percent climb after the Zee Business channel report. Reliance, India’s most valuable company, slipped 1.3 percent to 925.7 rupees.
The MSCI Asia Pacific Index rose 2.6 percent this week as reports showed Chinese and U.S. manufacturing, as well as Australia’s economy, expanded faster than economists’ estimated. U.S. initial jobless claims fell, and pending home sales unexpectedly increased.
India’s rupee strengthened to the highest level in two weeks as funds based abroad raised holdings of Indian shares to a record and the government reported the fastest pace of expansion in the second quarter since 2007.
‘Surge in Shares’
“The stronger growth and the surge in shares this week are helping the rupee,” said Sudarshan Bhatt, the Mumbai-based chief foreign-exchange trader at Corporation Bank.
Foreign fund inflows to India’s equities have climbed 60 percent this year, making the Sensex the most expensive benchmark index in Asia and among the BRIC markets that also comprise Brazil, Russia and China. The Sensex trades at 17.4 times estimated profit after extending last year’s biggest rally in 18 years.
Overseas funds bought a net 5.27 billion rupees ($112.4 million) of Indian equities on Sept. 1, raising total investments in the stocks this year to 604.5 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline
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