India Stocks Rise; Bharat Heavy, Larsen & Toubro Advance

July 4 (Bloomberg) -- Indian stocks rose after a regional political party said Prime Minister Manmohan Singh's nuclear agreement with the U.S. is ``satisfactory,'' signaling they may support the deal and prevent the government from collapsing.

Bharat Heavy Electricals Ltd., the country's largest power equipment maker, had the biggest gain on the Sensitive Index this week. Jaiprakash Associates Ltd., India's biggest builder of dams, climbed the most in more than three months.

``Early elections look unlikely now,'' said R.K. Gupta, who manages the equivalent of about $100 million of stocks at Taurus Asset Management Co. in New Delhi. ``Chances of the nuclear deal going through seem bright, that's giving some relief to the markets.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 359.89, or 2.8 percent, to 13,454. The index posted its seventh weekly decline, its longest losing run since the week ended April 13. The S&P CNX Nifty Index on the National Stock Exchange added 90.25, or 2.3 percent, to 4,016.

India's Samajwadi Party, a regional group based in the country's most populous state, will decide later today after meeting smaller parties whether to back the deal, Mulayam Singh Yadav, chief of the Samajwadi Party, told reporters in New Delhi after meeting Singh.

The ruling coalition is making a final attempt to shore up support for a nuclear energy accord before Singh and President George W. Bush meet in Japan next week. The Congress party, which leads the alliance, has sought backing from other parties to save the accord after its communist allies threatened to withdraw support.

Bharat Heavy
Bharat Heavy rose 7 percent to 1,500.20 rupees, the most since June 11. Jaiprakash added 11 percent to 153.50 rupees, its biggest advance since March 25. Larsen & Toubro Ltd., India's largest engineering company, gained 6.7 percent to 2,381.45 rupees. Siemens India Ltd., the local unit of Europe's biggest engineering company, jumped 11 percent to 428.40 rupees, its most since Oct. 29.

Stocks also rose after the weather office said India's monsoon, which accounts for four-fifths of the nation's annual rainfall, has been 21 percent above average so far this season.

ITC, the country's largest cigarette maker, rose 1.1 percent to 171.20 rupees. Hindustan Unilever Ltd., India's biggest maker of household goods, added 2.6 percent to 201.50 rupees.

Overseas funds sold a net 3.5 billion rupees ($87 million) of Indian stocks on July 2, increasing their net outflow this year from equities to $6.41 billion, according to the nation's stock market regulator.

Jain Irrigation Systems Ltd. (JI IN) rose 28.25 rupees, or 6.5 percent, to 461, its biggest gain since March 24. India's biggest agriculture-related company by value rebounded from a 14-month low after 3.1 percent of its shares traded in a single transaction. As many as 2.23 million shares traded at 442 rupees apiece at 10:06 a.m. local time on the Bombay Stock Exchange, data available on the Bloomberg showed. The buyers and sellers weren't immediately known.

Punj Lloyd Ltd. (PUNJ IN) added 28.2 rupees, or 14 percent, to 227.85, the most since May 23, 2006. The engineering and construction company got a 10.1 billion rupees contract from GVK Power (Govindwal Sahib) Ltd. to build a coal-fired thermal power project. Work on the project is expected to be completed by 2011, the company said.

Ranbaxy Laboratories Ltd. (RBXY IN) rose 24.45 rupees, or 4.8 percent, to 538.40, the most since June 10. Pfizer Inc., the world's biggest drugmaker, may offer 20 percent more than Daiichi Sankyo Co.'s $4.6 billon bid to obtain a majority stake in Ranbaxy, the Financial Chronicle reported, without citing anyone.

Reliance Communications Ltd. (RCOM IN) climbed 47.05 rupees, or 12 percent, to 436.75, the biggest advance since Feb. 4. India's second-largest mobile phone service operator plans to raise as much as $6 billion from banks to help fund its proposed acquisition of Africa's MTN Group Ltd., the Economic Times newspaper reported, citing unidentified people familiar with the matter.

SpiceJet Ltd. (SJET IN) rose 1.8 rupees, or 7.8 percent, to 25, the most since June 6. Kingfisher Airlines Ltd. is close to finalizing a share-swap deal with low-cost carrier SpiceJet, the Business Standard newspaper said, without saying where it got the information. SpiceJet's stockholders are expected to get one share of the merged entity for every three shares owned, the newspaper said.

Shrenuj & Co. (SJC IN) climbed 4.5 rupees, or 18 percent, to 30.10. The Indian diamond retailer rose the most since April 13, 1998, after 3.5 percent of its equity changed hands in a single trade.

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