India’s Stock Index Advances, Extending Second Weekly Gain

Sept. 18 (Bloomberg) -- India’s benchmark stock index rose, extending its second weekly gain. Dr. Reddy’s Laboratories Ltd. climbed to a record after the Economic Times reported GlaxoSmithKline Plc may buy a stake.

Dr. Reddy’s jumped 3.7 percent to the highest since Bloomberg began tracking it in 1991. Container Corp. of India Ltd. jumped the most in two months as Nomura Holdings Inc. upgraded the stock on its earnings outlook. ICICI Bank Ltd. and Tata Motors Ltd. fell after investors judged gains this week as excessive.

“The growth story will continue as companies are likely to report better numbers in the September quarter,” said A.N. Sridhar, a fund manager at Sahara Asset Management Co. in Mumbai. “Also, there is strong inflow by foreign funds and the worries about the drought have abated. These three factors helped the market go higher this week.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 30.19, or 0.2 percent, to 16,741.30. The gauge gained 2.9 percent this week. The S&P CNX Nifty Index on the National Stock Exchange gained 0.2 percent to 4,976.05. The BSE 200 Index rose 0.4 percent to 2,052.81.

Overseas funds bought a net 11.7 billion rupees ($243 million) of Indian stocks on Sept. 16, the Securities and Exchange Board of India said yesterday on its Web site. The funds have bought a net 450 billion rupees of the nation’s stocks this year, compared with record net sales of 530 billion rupees in 2008.

Container Corp.

Container Corp., a state-run cargo services company, climbed 6.3 percent to 1,164.25 rupees after Nomura raised it to “buy” from “reduce,” saying signs of improving economic conditions should allow the company to sustain “strong” earnings growth momentum over the next 12 to 15 months.

Dr. Reddy’s, the country’s second-largest drugmaker, rose 3.7 percent to 866 rupees, after the Economic Times said GlaxoSmithKline is in talks to buy a 5 percent stake in the Hyderabad-based company. Glaxo is in talks to strengthen its association with the Indian generic drugmaker, with whom it had signed a marketing alliance four months ago, the Economic Times said. Dr. Reddy’s declined to comment.

ICICI, the nation’s No. 2 lender, lost 3.6 percent after a three-day, 5.8 percent advance. Tata Motors, the biggest gainer on the index this year, lost 1 percent, trimming its surge in 2009 to 277 percent. The company, India’s biggest truckmaker and owner of Jaguar Land Rover Ltd., lost 1 percent to 599.9 rupees. Its RSI was over 70 for a fifth day.

ICICI, Tata Motors

ICICI lost 3.6 percent to 841.2 rupees, paring its advance to 88 percent this year. Its 14-day relative strength index, which measures how rapidly prices rose or fell during the specified period, has been over 70 for the past two days. Some investors regard readings at 70 or more as a signal to sell.

Tata Motors and other automakers make up the top three gainers on the Sensex this year. Mahindra & Mahindra Ltd., the largest sport-utility vehicle maker, rose 1.9 percent to 885.9 rupees, extending the year’s advance to 223 percent. Maruti Suzuki India Ltd., the maker of half the cars sold in India, jumped 5.1 percent to a record 1,639.3 rupees today.

“The auto sector leads the rally in any global recovery,” Sridhar said.

Raymond Ltd. advanced by the daily limit of 10 percent for the second day to 226.25 rupees. The textile and suit maker will build “affordable” homes on as much as 20 acres of its surplus land in north Mumbai, Chairman Gautam Singhania said yesterday.