Sensex tops Asia markets on Fed’s growth outlook

Bloomberg/Mumbai

Reliance Industries, owner of the world’s largest oil-refining complex, rallied the most in 21 months. Its shares jumped 5% to Rs755.05, its steepest rally since November 2009

Indian equities gained the most in Asia after Federal Reserve chairman Ben S Bernanke said the biggest economy is gradually recovering and didn’t extend steps that would have stoked commodity prices and fanned inflation.Reliance Industries Ltd, owner of the world’s largest oil-refining complex, rallied the most in 21 months. Hindalco Industries Ltd, the aluminum maker that controls US-based Novelis Inc, climbed the most in a week. Infosys Ltd, India’s second-largest software maker, led its peers higher. Five of the 30 stocks on the benchmark index rose more than 5%.The Bombay Stock Exchange Sensitive Index, or Sensex, rose 3.6% to 16,416.33 at the 3.30pm close, the most since May 2009. The gauge dropped for a fifth week in the five days ended Friday, the longest such run since October 2008. The S&P CNX Nifty Index advanced 3.6% to 4,919.6. Its September futures settled at 4,939.55.“There’s a relief that QE3 didn’t get announced because it would mean a flood of liquidity and pressure on commodity prices,” Nitin Rakesh, chief executive officer of Mumbai-based Motilal Oswal Asset Management Co, said by phone, referring to the Fed’s asset-purchase program known as quantitative easing. “Inflation won’t be addressed in the short-run if QE3 comes.”Bernanke said on Friday at Jackson Hole, Wyoming, he is “more optimistic” about the long-term prospects of the US economy even amid challenges from the slumping housing market and volatility. He extended the Federal Open Market Committee meeting in September by a day to “allow a fuller discussion” of the economy and the central bank’s possible response.Reliance surged 5% to Rs755.05, its steepest rally since November 2009. Hindalco increased 3.6% to Rs144.1.Infosys jumped 4.3% to Rs2,296.3 and larger rival Tata Consultancy Services Ltd rallied 7.5% to Rs1,019.6. Wipro Ltd, the third-biggest, increased 2.9% to Rs328.9. The BSE IT Index added 5%, the most in two years. The gauge has plunged 27% in 2011 as the nation’s biggest technology companies earn more than 80% of their sales from overseas, mainly from the US.Tata Motors Ltd, the Indian owner of Jaguar Land Rover, gained 4.6% to Rs730.7 after saying production at its Sanand plant, where it builds the Nano small car, has resumed after a temporary suspension.India’s rupee gained the most in almost a month on speculation global funds will buy emerging- market assets after the Federal Reserve said it has the tools to support growth in the US economy.The currency rose 0.2% to 46.05 per dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg, the biggest advance since August 1.Offshore forwards indicate the Indian currency will trade at 46.46 to the dollar in three months, compared with expectations of 46.59 on Friday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.