Sensex has biggest jump in more than three months

Bloomberg/Mumbai

India’s benchmark equity index had its biggest gain since November as some investors judged recent losses as excessive and as Asian stocks climbed on bets central banks globally will continue stimulus measures to boost growth.

The S&P BSE Sensex index rose 1.4% to 19,143.17 at the close, the most since November 29.

The MSCI Asia Pacific Index increased 0.5% as US Federal Reserve vice-chairman Janet Yellen said yesterday the central bank should press on with $85bn in monthly bond buying. Kikuo Iwata, a nominee for Bank of Japan deputy governor, said in a confirmation hearing today that the central bank should buy longer-term bonds to help achieve a 2% inflation target.

Sterlite, India’s biggest copper producer, increased 4.8% to Rs94.75, the top performer on the Sensex yesterday. Copper climbed the most in a week in London after China held a target for economic growth at last year’s level, supporting the demand outlook in the biggest consumer of the metal. Aluminum producer Hindalco Industries rallied 4.5% to Rs98.60, the steepest gain since October 31.

Reliance, owner of the world’s largest refining complex, added 1.7% to Rs826.35. ICICI Bank, the country’s largest private lender, jumped 3.3% to Rs1,093.60, the most since November 29.

Tata Motors, the nation’s biggest truckmaker, rallied 3.7% to Rs300.5, the most since Jan 9. Maruti Suzuki India, the largest carmaker, added 2.3% to Rs1,430.75. Indian automakers benefit from lower borrowing costs as 80% of vehicle purchases are funded with loans.

Volumes on the Sensex were 7.9% more than the 30-day average. The 50-stock CNX Nifty Index of the National Stock Exchange of India jumped 1.5% to 5,784.25 while its March futures settled at 5,802.80. India VIX, which measures the cost of protection against losses in the Nifty, retreated 2.1% to 13.39.

Meanwhile, rupee ended at 54.9250 per dollar in the spot market, compared with 54.8650 Monday. It had risen as much as 0.5% earlier, with gains limited by importers’ purchases of dollars. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 20 basis points, or 0.20 percentage point, to 9.81%.