Bloomberg/Mumbai

Indian stocks completed the biggest weekly gain in a month, led by industrials and metalmakers, as global funds extended their purchases of local shares.
Bharat Heavy Electricals, the biggest power-equipment maker, rallied to its highest level since February 3. Mahindra & Mahindra, the largest tractor maker, climbed the most in two weeks. Vedanta Ltd, a copper and aluminium maker, and Tata Steel increased more than 1% each.
The Sensex added less than 0.1% to 28,463.31 at the close, taking the week’s advance to 2.9%, the most since the period ended June 19. The gauge rose to a three-month high on Thursday after the government said it is considering changes to foreign investment rules. Foreigners have turned net buyers of domestic shares this month for the first time since April as signs that Greece may find a way out of its immediate crisis boosted demand for riskier assets.
“The fundamental and technical factors affecting India have been digested,” Prabhat Awasthi, head of equity research at Nomura Holdings, said in an interview with Bloomberg TV India yesterday. “That makes for a better environment as far as the markets are concerned.”
Bharat Heavy surged 2.3%, the best performer on the Sensex. Mahindra & Mahindra added 1.6%. Vedanta gained 1.3% and Tata Steel increased 1.2%.
Infosys, the second-largest software exporter, rose 1.3% in a fifth day of gains, the longest winning streak in two months.
Axis Bank dropped from a four-month high and Kotak Mahindra Bank fell from a record after government officials said the review of limits on foreign investments isn’t applicable to lenders and defence companies.
Finance Minister Arun Jaitley said Thursday foreign direct and portfolio inflows will be clubbed with investments by non- resident Indians under a common cap for sectors. Banks and defence companies have been kept out of this review, government officials familiar with the matter said yesterday.
Global investors bought a net $119mn of domestic stocks on July 16, taking this year’s inflows to $7bn. The Sensex has risen 3.5% this year and trades at 15.8 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.6.
Meanwhile the rupee rose 0.1% yesterday to 63.4750 a dollar, according to prices from local banks compiled by Bloomberg. The currency snapped a two- week advance as India’s exports fell for a seventh month in June and the Federal Reserve said it’s on track to raise interest rates this year.
India’s 10-year sovereign bonds posted their biggest weekly drop this month on speculation rising inflation will prevent further interest-rate cuts.