Indian stocks climbed to the highest in 10 weeks yesterday, with the benchmark index gaining the most in Asia, as the government moved to soothe foreign investors’ concerns over tax rules and Morgan Stanley upgraded the nation’s shares.
The BSE India Sensitive Index, or Sensex, rose 2.6% to 17,429.98 at close in Mumbai, the highest since April 19. The gauge, Asia’s best performing index in June, has posted two straight quarters of gains for the first time since the three months ended December 31, 2010.
India said on Thursday it plans to apply anti-tax avoidance rules from April 1, 2013, quashing concerns the norms would be used retrospectively, a day after Prime Minister Manmohan Singh took charge of the finance ministry.
The Sensex has gained 13% this year and trades at 13.7 times estimated earnings. Valuations sank to a three-year low of 12.4 times on May 23. The MSCI Emerging Markets Index trades at 10.1 times.
The rupee surged the most since May 2009, making it the best performing currency in Asia yesterday, after European leaders agreed to ease repayment rules on emergency loans to Spanish banks.
The currency also got a boost on optimism the government will refrain from asking companies involved in overseas deals in which an Indian asset is transferred to pay back taxes.
The rupee advanced 2.1% yesterday and 2.7% this week to 55.6375 per dollar in Mumbai, according to data compiled by Bloomberg. It was the biggest weekly increase since October 2009. The currency dropped 8.6% this quarter, the biggest loss since the three months through September and the worst performance among Asian currencies, after touching a record low of 57.3275 on
from gulf times.