Indian stocks rose for the second week. Hindustan Unilever Ltd., a household products maker, climbed to a four-month high after its board said it will consider buying back shares.
Maruti Suzuki India Ltd., the biggest carmaker, rose to the highest in more than a month after the Economic Times said automakers will step up investment to meet demand. Hindalco Industries Ltd., India's biggest aluminum producer, climbed, reversing an earlier decline of as much as 1.6 percent, after reporting an eightfold gain in full-year group profit.
"Investors should look out for arbitrage opportunities like delisting, buyback of shares or a corporate restructuring for short-term gains," said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. Thunuguntla declined to name specific stocks.
The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 95.36, or 0.6 percent, to 17,117.69, erasing an earlier decline of as much as 0.3 percent. The index dropped 3.5 percent last month as foreign investors sold a net 94.4 billion rupees ($2 billion) of stocks in May, the worst month since October 2008, following the collapse of Lehman Brothers Holdings Inc.
The Sensex rose for a third day, extending its weekly advance to 1.5 percent, its second such period of gains. The S&P CNX Nifty Index on the National Stock Exchange rose 0.5 percent to 5,135.50. The BSE 200 Index increased 0.4 percent to 2,173.
Share Buyback
Hindustan Unilever, a unit of the world's second-largest consumer-goods maker, advanced 1.9 percent to 251.7 rupees, its highest close since Jan. 28. The company's board will meet on June 11 to consider a proposal to buy back shares, according to a stock exchange filing.
Maruti Suzuki, the nation's biggest carmaker, climbed 2.6 percent to 1,330.05 rupees, the highest since April 26. Automakers in the nation will invest an estimated $30 billion during the next four years as demand rises, the Economic Times newspaper reported, citing Vishnu Mathur, director general at the industry lobby group Society of Indian Automobile Manufacturers. Mathur wasn't immediately available to comment on the report.
Hindalco added 1.1 percent to 147.6 rupees. Net income surged to 39.3 billion rupees, from 4.84 billion rupees a year earlier, according to a Bombay Stock Exchange statement. Sales fell 8 percent to 607.2 billion rupees.
Lenders
ICICI Bank Ltd., the country's second-biggest lender, rose 1.4 percent to 865.85 rupees, while larger rival State Bank of India added 2.4 percent to 2,340.75 rupees.
India said it is better to increase regulation for lenders rather than imposing a bank tax, joining Canada in publicly opposing a new levy on financial institutions that some European leaders have pushed for.
"Regulated mechanisms instead of taxing the banking system is better," Finance Minister Pranab Mukherjee said in an interview in Busan, South Korea, where he is attending a meeting of finance officials from the Group of 20. He named the cash- reserve ratio, where banks are forced to set aside money as reserves, as an example of a policy tool that can be used.
Overseas investors sold a net 1.28 billion rupees of Indian stocks on June 2, reducing their purchases of the equities this year to 207.7 billion rupees, according to the nation's market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
The following were among the most active on the exchange:
Cadila Healthcare Ltd. (CDH IN) increased 2.6 percent to 623.15 rupees, its highest close in more than two weeks. The drugmaker introduced India's first locally developed swine flu vaccine for 350 rupees a shot, the South Asian country's Health Minister Ghulam Nabi Azad said.
Godrej Consumer Products Ltd. (GCPL IN) rose 2.3 percent to 342.65 rupees. The company plans to raise as much as 7 billion rupees through the qualified institutional placement route to fund acquisitions, the Business Standard newspaper reported, citing Chairman Adi Godrej. Managing Director Dalip Sehgal wasn't immediately available at his office telephone for comment on the report.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.
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