Indian stocks climbed for a third day, helping the benchmark gauge cap its best week in four months, as automakers and lenders advanced.
Hero MotoCorp, the nation’s largest two-wheeler maker, rallied to a six-week high, while Bajaj Auto climbed to a one-month high. Mahindra & Mahindra, a tractor maker, rose to its highest price in three weeks. State Bank of India advanced for a third day, the longest run of gains in two months. ICICI Bank increased for a second day after falling to a two-year low on Wednesday.
The S&P BSE Sensex advanced 0.3 at close in Mumbai after changing direction at least 14 times. The gauge has risen 3.2% this week, its best since the period ended October 11, after Saudi Arabia and Russia proposed freezing crude output amid a global surplus. The focus has shifted to India’s federal budget on February 29, as investors seek clarity on the government’s plan to lower the corporate tax rate and phase out tax exemptions.
“This week’s rally has been driven largely by expectations from the budget, as investors are watching out for it,” Nitasha Shankar, vice president for equity research at Yes Securities in Mumbai, said in an interview with Bloomberg TV India. “Valuations have become very attractive after the selloff last week.”
Economists surveyed by Bloomberg expect Finance Minister Arun Jaitley to meet the government’s fiscal deficit target for the year ending March 31, while slightly pushing back next year’s goal to 3.6% of gross domestic product. The Reserve Bank of India left interest rates unchanged this month after four cuts in 2015, with Governor Raghuram Rajan saying that his next move would depend on inflationary trends and the budget.