Mumbai: Indian stocks rose for a third day, driving the benchmark index to its highest in five weeks, as companies from JSW Steel Ltd to Lanco Infratech Ltd announced expansion plans that may boost profitability.
JSW Steel, the nation’s third largest producer, climbed to a one-month high after offering Rs 2,160 crore for a controlling stake in Ispat Industries Ltd. NMDC Ltd, the biggest iron ore producer, advanced the most in about three weeks on plans to buy an Australian mine. Lanco Infratech gained after saying it intends to purchase more overseas assets.
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“Indian companies are more confident now. They are looking to acquire assets for growth,” said Tejas Doshi, vice-president of equity research at Sushil Financial Services Pvt. Ltd in Mumbai. “These will hopefully add to their profitability.”
The Bombay Stock Exchange Sensex gained 171.44 points, or 0.86%, to close at 20,060.32. The index closed at its highest level since 15 November. Companies on the Sensex are valued at an average of 19 times the estimated earnings, compared with a recent peak of 20.1 times on 5 November. The S&P CNX Nifty index on the National Stock Exchange rose 0.9% to close at 6,000.65 points. The BSE 200 index increased 0.85% to 2,481.50 points.
JSW Steel added 2.1% to Rs 1,211.8, its highest close since 23 November. Ispat, a steel maker owned by Lakshmi Mittal’s brothers, will sell JSW the new shares at Rs 19.85 each, 21% less than Monday’s closing price, according to a stock exchange filing. Ispat sank 15% to Rs 21.20.
NMDC went up 2.6% to Rs 263.55. The purchase of the mine in Australia will be completed in about two months, chairman Rana Som said, without disclosing the price or target.
Lanco Infratech, the company that agreed to buy Australia’s Griffin Coal Mining Co. Pty. Ltd, rose 0.6% to Rs 62.5, paring an earlier advance of as much as 3.1%. Lanco is looking for more overseas assets so it can boost power capacity sevenfold by 2015, chief executive officer Nagaprasad Kandimalla said.
Sterlite Industries (India) Ltd, the biggest copper and zinc producer, surged 5% to Rs 176.75 as metal prices increased. Hindalco Industries Ltd, the biggest aluminium producer, jumped 4.3% to Rs 233.6, while Tata Steel Ltd, the biggest producer of the alloy, climbed 1.5% to Rs 676.2. Copper advanced to a record in London after China’s imports increased for the first month in three, boosting the demand outlook.
Graphics by Paras Jain/Mint