Mumbai: Indian stocks advanced for a second day after forecast of a stronger than usual monsoon rainfall eased concerns about inflation and improved the outlook on company earnings.

Jain Irrigation Ltd and EPC Industrie Ltd, makers of irrigation equipment, rallied at least 6%. Hero MotoCorp Ltd and Bajaj Auto Ltd, the largest two-wheeler producers, rose more than 1%, while Maruti Suzuki India Ltd, the biggest car maker, climbed to a one-week high. GAIL India Ltd soared the most on the S&P BSE Sensex after saying it got bids from two groups to transport shale gas to India from the US.

The Sensex gained 0.5%, or 123.43 points, to 25,145.59 at the close, adding to Monday’s 1.4% advance. The monsoon may be above average for the first time since 2013, the weather office said on Tuesday, joining forecaster Skymet Weather Services Pvt. Ltd in predicting stronger showers. Back-to-back rain shortfall last year dried rural demand, which contributed to the drop in Sensex company earnings in four of the last five quarters.

“A good monsoon drives agricultural growth and leaves farmers with more money to spend, which in turn improves earnings of companies linked to the rural economy," said Purvesh Shelatkar, senior vice-president and head of equity at BOB Capital Markets Ltd. in Mumbai. BOB is bullish on State Bank of India, Maruti Suzuki and Tata Motors Ltd, and maker of auto parts including Amara Raja Batteries Ltd and Motherson Sumi Systems Ltd, he said.

Monsoon outlook

Showers during the June-September monsoon season will probably be 106% of the mean of about 89 centimeters (35 inches) as the El Nino weather pattern that brings dry weather weakens, the India Meteorological Department (IMD) said after market hours on Tuesday. Rains may be 105% of the average, Skymet said on Monday.

Investors also awaited monthly inflation and industrial data.

The central bank lowered its key interest rate to a five-year low this month and said it would look for more room to ease as it watches monsoon rains.

Jain Irrigation surged 6.1%, the most since 18 February. EPC soared 7.5% to its highest level since 22 February. Kaveri Seed Co. added 3.3%, while Avanti Feeds Ltd jumped 12%, the most since 10 August.

Hero MotoCorp advanced 2.5% to its highest level since December 2014. Bajaj Auto gained 1.1%. Escorts Ltd, a tractor and two-wheeler maker, surged the most since 27 August. Maruti Suzuki had the steepest gain since 9 March. Ashok Leyland Ltd increased to a record. Tata Motors rallied 2.4% to its highest price this year.

GAIL surged to its highest level since 11 January. GAIL had tendered for transporting the gas starting 2017-18, people with knowledge of the process said, declining to be identified as the deal hasn’t been finalized. The tender documents say supplies from Louisiana’s Sabine Pass project are expected to commence in March 2018 and deliveries from Maryland’s Cove Point terminal in December 2017.

Oil and Natural Gas Corp. Ltd, the largest state-owned explorer, added 1.8%. ICICI Bank Ltd, the country’s biggest private lender, climbed 1.8%%.

Factory output may have expanded 0.6% from a year earlier in February, compared with a 1.5% decline in January, according to another survey.

Global funds bought $23.5 million of Indian shares on Monday, taking the year’s inflow to $1.1 billion. Bloomberg

Manish Modi contributed to this story.