Indian stocks advance beyond expectations

Mumbai: Most Indian stocks climbed amid expectations local companies will benefit from strengthening economic growth.

Sterlite Industries (India) Ltd, the nation's biggest copper and zinc producer, gained for the third day as ore prices advanced after a slew of better-than-expected data from the US and China fuelled speculation the global economy is recovering.

Infosys Technologies Ltd, a software exporter that gets two third of its sales from North America, gained 1.1 per cent.

The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 17.99, or 0.1 per cent, to 18,256.30 at 9:49a.m. in Mumbai, set for a 1.4 per cent weekly advance.

Three stocks rose for each two that fell. The S&P CNX Nifty Index on the National Stock Exchange was little changed at 5,484.35. The BSE 200 Index increased 0.2 per cent to 2,347.10.

"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 US data. The overall trend in the stock market is positive."

Sterlite climbed 1 per cent to 162.3 rupees (Dh12.8). Copper traded near a four-month high, and headed toward a third weekly advance, after US initial jobless claims fell and pending home sales unexpectedly increased.

The Chinese purchasing managers' index rose more than forecast in August, a government-backed report showed September 1. India's gross domestic product accelerated at the fastest pace in 2 1/2 years, according to an August 31 report.

Infosys

Infosys rose 1.1 per cent to 2,782.95 rupees, while Tata Consultancy Services Ltd, the largest software services exporter, gained 0.8 per cent to 850.95 rupees.

Foreign fund inflows to India's equities have climbed 60 per cent 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 is trading 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 of Indian equities on September 1, raising total investments in the stocks 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, 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.