Mumbai: India's benchmark stock index rose to the highest level in a week after a report showed factory output grew at close to a record pace, fanning speculation company earnings will benefit.
Mahindra & Mahindra Ltd, the nation's largest maker of sport-utility vehicles and tractors, climbed to its highest in at least 19 years. India's industrial production grew 17.6 per cent in April, faster than the 14.3 per cent median estimate of 24 analysts in a Bloomberg survey. Reliance Industries Ltd, India's most valuable company, soared the most in a month on speculation that it's looking to buy shale gas assets in the US and after saying it discovered more oil.
"The numbers signify that there's strong demand for consumer durable and capital goods," said Manish Sonthalia, who helps manage the equivalent of $200 million in equities at Motilal Oswal Securities Ltd. in Mumbai. Sonthalia, who declined to say what he's buying and selling, predicts Sensex company earnings will grow by about an average 25 per cent in the year through March.
The BSE's Sensitive Index, or Sensex, gained for a third day, adding 142.87, or 0.8 per cent, to 17,064.95, paring the week's loss to 0.3 percent.
The S&P CNX Nifty Index on the National Stock Exchange rose 0.8 per cent to 5,119.35.
