Bloomberg

Mumbai

Indian stocks advanced, sending the benchmark index to a record in a shortened session. Automakers and metal producers led the gains.

Tata Motors, the owner of Jaguar Land Rover, rallied to its all-time high. Jindal Steel & Power climbed for the second day, sending a measure of metal makers to an eight-month high. Indian Oil Corp surged the most in two months, leading other state-owned refiners higher.

The 30-stock S&P BSE Sensex rose 0.2% to 21,239.36 in special Diwali trading in Mumbai, a fifth day of gains.

The gauge has increased 9.3% this year, the most among the four largest emerging markets, as more companies posted profits that beat estimates and as monetary stimulus helped spur $2.9bn of net foreign flows into shares last month.

“There been some pick-up in the economy and corporate performance has been ahead of expectations,” Raamdeo Agrawal, joint managing director of Mumbai-based Motilal Oswal Financial Services, said on Bloomberg TV India yesterday. “The downside is limited and people who have stayed out of the market should start investing.”

Net incomes at 16 of the 19 companies in the Sensex that have posted results exceeded analyst estimates, according to data compiled by Bloomberg. About 47% of the 30 companies in the index missed forecasts in the previous quarter. Foreigners bought $290mn of local shares on October 31, the biggest net inflow since September 20, data from the regulator showed yesterday.

Investors and traders made ceremonial purchases of stocks in the 75-minute session until 7:30pm, marking Diwali, the festival of lights and the start of the Hindu new year, Samvat 2070. The session known as ‘Muhurat trading’ is held every year on Diwali and deemed the most auspicious time to start investments.

The Sensex has risen 14% since last Diwali on November 11, 2012, boosted by purchases by overseas investors. Shares of 21 of the 30 Sensex firms have risen since last year’s ‘Muhurat trading’ day, led by drug maker Sun Pharmaceutical Industries and Tata Consultancy Services, India’s biggest software exporter. Power-equipment maker Bharat Heavy Electricals and Jindal Steel are the biggest losers over the period.

The Sensex traded at 14.1 times projected 12-month profits, in line with its five-year average. The MSCI Emerging Markets Index was valued at 10.5 times earnings. Overseas funds have invested $16.3bn into domestic shares in 2013, the most among 10 Asian markets tracked by Bloomberg after Japan.

The CNX Nifty Index added 0.2% to 6,317.35. The India VIX, which gauges the cost of protection against losses in the Nifty, gained 4.6%.

Stock exchanges will remain closed today.