India Stocks Advance Most in More Than Four Years; ICICI Gains

By Pooja Thakur

Oct. 13 (Bloomberg) -- Indian stocks rose, driving the Sensitive index to its biggest gain in more than four years, as governments around the world stepped up efforts to avert a collapse of the global banking system.

ICICI Bank Ltd., the Indian lender with the biggest losses on overseas investments, climbed by a record after its chief executive officer said the bank has sufficient funds. Reliance Industries Ltd., India's most valuable company, gained 2.6 percent, the most in three weeks. Gains accelerated as the U.K. agreed to invest $64 billion in Royal Bank of Scotland Group Plc, HBOS Plc and Lloyds TSB Group.

``Markets were definitely looking oversold,'' said Jayesh Shroff, who helps manage about $3.5 billion at SBI Mutual Fund in Mumbai. ``The liquidity infusion by countries across the globe is giving some relief to markets.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 728.61, or 6.9 percent, to 11,256.46 as of 12:45 p.m. local time, set for its biggest gain since May 18, 2004. The gauge tumbled 16 percent last week, taking its 14-day relative strength index, which measures how rapidly prices rose or fell during the period, to 21.8 on Oct. 10. Some investors regard readings at 30 and below as a signal to buy.

The S&P CNX Nifty Index on the National Stock Exchange climbed 118.85, or 3.6 percent, to 3,398.80. The BSE 200 Index added 3.8 percent to 1,301.50. Nifty futures for October delivery added 3.6 percent to 3,423.

ICICI Surges

India will ``shortly'' announce more measures to increase the amount of cash in the financial system, Finance Minister Palaniappan Chidambaram said today before the stock market opened. The minister said the government, the Reserve Bank of India and the Securities & Exchange Board of India are working on a coordinated action plan.


Australia and New Zealand's governments said they will back all deposits with financial institutions. Indonesia raised the maximum guaranteed deposits at banks 20-fold. European leaders pledged to protect new bank debt until the end of 2009 and let governments shore up lenders.

ICICI jumped 25 percent to 453.05 rupees, the most since the stock started trading in September 1997. The lender's shares fell by a record 20 percent on Oct. 10, taking the stock's relative strength index to 24.

The bank is being targeted by short sellers who have spread rumors that the bank may struggle to refund depositors, CEO K.V. Kamath. The stock has slumped 35 percent in a month as the credit crisis forced Lehman Brothers Holdings Inc. to file for bankruptcy.

Overseas Sellers

HDFC Bank Ltd., the nation's No. 3 lender, rose 8.4 percent to 1,136.15. State Bank of India, the country's largest, jumped 5.9 percent to 1,431.95. Reliance gained 2.6 percent to 1,567.15 rupees, the most since Sept. 19.

Overseas investors sold a net 8.48 billion rupees ($210.1 million) of Indian equities on Oct. 8, increasing the outflow this year from stocks to $10.1 billion, according to the nation's stock market regulator.

The following were among the most active stocks traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:

Axis Bank Ltd. (AXSB IN) jumped 62.65 rupees, or 11 percent, to 615.25. India's fourth-biggest by market value reported second-quarter profit rose 77 percent to 4.03 billion rupees. Profit beat the 3.42 billion rupees median estimate of three analysts surveyed by Bloomberg News.

Hindalco Industries Ltd. (HNDL IN) added 6.8 rupees, or 8.4 percent, to 87.60. Founders and underwriters bought as much as 80 percent of the new stock sold by the Indian aluminum maker after a poor response from shareholders, The Economic Times reported Oct. 11.

Jaiprakash Associates Ltd. (JPA IN) rose 3.1 rupees, or 4.1 percent, to 79.20. India's largest builder of dams said its board will meet Oct. 21 to consider a plan to sell shares to existing shareholders.

Shipping Corp. Of India Ltd. (SCI IN) gained 5.4 rupees, or 4.4 percent, to 129. The state-owned shipping company plans to buy four oil tankers each costing as much as $160 million, the Mint newspaper reported.

To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net