India’s benchmark stock index posted its biggest jump in a month amid optimism over the progress of economic bills in parliament and as global equities climbed on speculation the Federal Reserve may raise interest rates gradually.
Bajaj Auto and Hero MotoCorp, the biggest two-wheeler makers, were among the biggest gainers on the S&P BSE Sensex. ICICI Bank and Axis Bank rose at least 3%.
Housing Development Finance Corp, India’s largest mortgage lender, rallied to a four-month high. NTPC, the largest power utility, jumped the most in a month.
The Sensex increased 1.82%, or 460.36 points, to 25,688.86 at the close, the best performance in Asia. Productivity of both houses of parliament has been the highest in a year, according to data from PRS Legislative Research. 
The lower house last week approved a bill that looks to overhaul century-old bankruptcy laws and make it easier to wind up a dying company or recover dues from a defaulter.
“Interest-rate sensitives are rallying on expectation that the bankruptcy bill will be passed as a money bill in parliament, which will enable banks to reduce bad debts,” A K Prabhakar, the head of research at IDBI Capital Capital Market Services, said by phone from Mumbai. “Also, company earnings are showing a marked improvement in net interest margins across the board.”
Earnings in the world’s fastest-growing major economy seem to be recovering after the worst run since the global financial crisis. Seven out of 12 Sensex firms that have posted March- quarter results so far beat or matched estimates.
Hindustan Unilever, the biggest home-products company, reported a quarterly profit of Rs10.9, higher than the Rs10.3bn estimate of 22 analysts in a Bloomberg News survey. 
Still, the stock declined 0.9% after the company’s sales of Rs78.1bn, less than the Rs79.9bn estimate.
European and Asian stocks rose after disappointing US payrolls data added fuel to the argument against a Federal Reserve interest rate increase in June.
“The US non-farm payrolls data suggest that the Fed is unlikely to raise rates anytime soon,” Abhimanyu Sofat, founder at AdviseSure Ventures in Mumbai, said by phone. “The earnings season has been better than expected and a good monsoon can trigger further rate cuts in India.”
The Sensex has lost 1.6% this year and trades at 15.9 times 12-month projected earnings versus 11.3 for the MSCI Emerging Markets Index. 
Foreign investors sold $49.3mn of local stocks on May 5, paring this year’s inflows to $1.7bn. They invested $585mn last month after an inflow of $4.1bn in March, which was the highest in three years. Meanwhile the rupee yesterday erased all gains and closed marginally weaker against the US dollar after Asian currencies closed lower.
The home currency closed at 66.58, down 0.04% from its previous close of 66.56. The rupee opened at 66.50 a dollar and touched a high and a low of 66.39 and 66.59, respectively, in intraday trade.
Asian currencies closed lower. Japanese yen was down 1%, Singapore dollar 0.34%, China renminbi 0.22%, Malaysian ringgit 0.2%, China offshore 0.15%, Taiwan dollar 0.11%, Thai baht 0.1% and Philippines peso declined 0.07%. However, South Korean won was up 0.34% and Indonesian rupiah 0.26%.
India’s 10-year bond yield closed at 7.425%, as compared with its Friday’s close of 7.433%. On Sunday, China’s exports and imports fell more than expected in April, underlining weak demand at home and abroad and cooling hopes of a recovery in the world’s second-largest economy.
On Friday, US non-farm payrolls increased by 160,000 jobs last month, far below the 202,000 economists polled by Reuters had forecast on average. The number was lower than the first-quarter average monthly job growth of 200,000. 
The data cast doubts on whether the US Federal Reserve will raise interest rates before the end of the year, the Reuters report added.
So far this year, the rupee has weakened 0.64%, while foreign institutional investors have bought $1.68bn from the local equity market and sold $151.10mn in the debt market.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.018, up 0.14% from its previous close of 93.888.