Stocks climbed for a sixth session, reversing an earlier decline, as European shares rose amid speculation the region's central bank will ramp up monetary stimulus. Maruti Suzuki India was the top performer on theBSE Sensex. Mahindra & Mahindra climbed for a fourth session. Larsen & Toubro, the most valuable engineering company, rose to a two-month high, while Hindustan Unilever gained for the first time in four days.
The Sensex added 135 points, or 0.6 per cent, to close at close 24,793.96 in Mumbai, posting its longest winning streak since October. The gauge erased an intra-day decline of 0.8 per cent after European shares began trading at about 1:30 pm local time. Economists surveyed by Bloomberg forecast that the European Central Bank will deliver a package of easing measures in its attempts to bolster price growth.
"There's speculation that there will be efforts by central banks to boost markets," R K Gupta, managing director of Taurus Asset Management Co, which has $520 million, said by phone from New Delhi. "In India, hopes of a rate cut have increased after the budget."
Rate survey
The Sensex on Friday capped its biggest weekly rally since December 2011 after Finance Minister Arun Jaitley February 29 pledged to further shrink the budget gap, stoking speculation of an interest-rate cut by the Reserve Bank of India (RBI). Twelve of 16 economists surveyed by Bloomberg after the budget expect RBI to cut the benchmark rate by as much as 50 basis points before the April 5 review.
The budget also plans to boost spending on public projects, while increasing allocation to a rural jobs program, proposals that have spurred capital inflows. Global investors have bought $1.1 billion of local shares this month, paring this year's outflows to $1.8 billion. The inflows have coincided with a rebound in prices of oil, iron ore and copper.
"Global markets have stabilized a bit, especially after the rally in commodities, and the good news for India is that foreign investors are back as buyers," said Gupta.
Maruti Suzuki surged 3.3 per cent to pare this year's loss to 23 per cent. Its parent Suzuki Motor Corp started shipping India-built cars to Japan for the first time and said plants in its biggest market are now capable of making vehicles at the same level of quality as factories in Japan. Mahindra & Mahindra added 1.3 per cent.
Larsen & Toubro increased 2.1 per cent to its highest level since January 6. Hindustan Unilever added 1.6 per cent.
Foreigners bought $115 million of Indian shares on March 8. The Sensex has declined 5.1 per cent this year and trades at 15.2 times 12-month projected earnings, compared with 11.4 for the MSCI Emerging Markets Index.
