India's stocks rally most in Asia

Mumbai: Indian stocks climbed the most in Asia as overseas funds continued to buy local shares even amid concerns weakening government finances may slow economic growth.

Tata Consultancy Services Ltd., the nation's largest software maker, rose the most in about four months. Larsen & Toubro Ltd., the biggest engineering company, jumped 4.6 per cent, ending four days of losses. DLF Ltd., the biggest developer, climbed the most in three weeks.

The BSE India Sensitive Index, or Sensex, advanced 1.7 per cent to 17,601.71. Foreign funds have bought a net $8.9 billion of local shares this year, a record for the period, even as corporate-profit growth slows, interest rates remain at a three-year high, oil prices jump and the government struggles to tackle a widening fiscal gap.

"A rally here has to be led by foreign money because you don't have a catalyst in the local market," Sadanand Shetty, a senior fund manager at Taurus Asset Management Co., which manages about $910 million, said by phone today. "Foreign flows is the only trigger left for a sustained rally."

The Sensex has risen 14 per cent this year as foreign funds made purchases on optimism slowing inflation will spur the RBI to ease monetary policy.