Indian Stocks Gain on Nuclear Energy Agreement; Larsen Advances...

Indian stocks rose after the nation won the right to buy nuclear energy supplies for the first time in three decades.

Larsen & Toubro Ltd., India's biggest engineering company, and Bharat Heavy Electricals Ltd., India's biggest power- equipment maker, both gained more than 3 percent on speculation they will win orders for power-generation equipment. Stocks also advanced after the U.S. government's takeover of Fannie Mae and Freddie Mac buoyed confidence the global economy can weather the subprime mortgage crisis.

The nuclear agreement ``has far more impact on the sentiment here than the Fannie Mae, Freddie Mac rescue,'' said A. Balasubramanium, who oversees $8.7 billion in assets as chief investment officer at Birla Sun Life Asset Management Co. ``The power sector gets a boost.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 461.14, or 3.2 percent, to 14,944.97, its biggest advance since Sept. 2. The S&P CNX Nifty Index on the National Stock Exchange added 130, or 3 percent, to 4,482.30.

India won the right to buy nuclear energy supplies after a group of 45 nuclear-technology supplying countries on Sept. 6 granted a waiver for sales to the South Asian nation outside the nuclear Non-Proliferation Treaty. The Nuclear Suppliers Group awarded the exemption after meeting for more than four days and following months of negotiations.

Key Beneficiaries

The lifting of the three-decade-old ban will give India access to atomic fuels and technology that the country says it needs to meet a power shortage of as high as 17 percent during peak hours. Economic growth of more than 8 percent annually since 2003 has put pressure on the country's power generation.

Larsen, Bharat Heavy and Hindustan Construction Co. are key beneficiaries from the nuclear deal, JPMorgan Chase & Co. said in a note to clients today. There could be a renewed thrust in introducing nuclear plants and improving the efficiency of India's existing nuclear capacity, the note said.

Larsen climbed 4.6 percent to 2,737.50 rupees. Bharat Heavy gained 3.4 percent to 1,791.70 rupees. NTPC Ltd., India's top power producer, rose 4.6 percent to 181.55 rupees, the most since July 18. Hindustan Construction added 7.4 percent to 104.35 rupees, the most since Aug. 11.

Finance shares advanced after the U.S. government said it's taking over Fannie Mae and Freddie Mac. The biggest surge in mortgage defaults in three decades threatened to bring down the two companies, which account for almost half the U.S. home-loan market. A global credit-market slump has caused more than $500 billion of losses and writedowns.

ICICI Bank

ICICI Bank Ltd., the nation's second-biggest bank by assets, rose 4.9 percent to 720.45 rupees, the highest since Aug. 12. State Bank of India, the largest lender, advanced 4.7 percent to 1,591.75 rupees, its highest since Aug. 11. HDFC Bank Ltd., the third-biggest, climbed 4.2 percent to 1,301.10 rupees.

Overseas investors sold a net 3.99 billion rupees ($89.34 million) of Indian stocks on Sept. 4, according to the nation's market regulator.

The following are among the most active stocks traded on the Bombay and National Stock Exchanges. Stock symbols are in parentheses after company names:

Sugar stocks: India's top court ordered sugar mills in the state of Uttar Pradesh to pay farmers 110 rupees ($2.5) for 100 kilograms (220 pounds) of sugarcane this year, less than what the government of the northern state advised.

The court-set price will help sugar makers lower costs and improve earnings in the year ended Sept. 30.

Shree Renuka Sugars Ltd.(SHRS IN), the nation's biggest refiner, jumped 6.1 rupees, or 5.4 percent, to 120.20. Bajaj Hindusthan Ltd. (BJH IN), the nation's biggest sugar producer, climbed 6.45 rupees, or 3.9 percent, to 170.65.

Punj Lloyd Ltd. (PUNJ IN) gained 11.8 rupees, or 4 percent, to 308.50. Saipem SpA, Europe's biggest oil-field services contractor by market value, and Punj Lloyd, the Indian engineering company, will jointly bid for a contract to build Singapore's first natural-gas import terminal.

Tata Motors Ltd. (TTMT IN) rose 16.4 rupees, or 3.9 percent, to 436.45. India's Trinamool Congress agreed to withdraw an agitation that forced Tata Motors to suspend work at its factory for the world's cheapest car, ending a two-week-long impasse. India's biggest truckmaker said it won't restart work until it was convinced ``the viability of the project is not being impinged.''

Tech Mahindra Ltd. (TECHM IN) climbed 16.5 rupees, or 2.2 percent, to 774.20. Buyout firm Kohlberg Kravis Roberts & Co. may bid for BT Group Plc's 31 percent stake in Tech Mahindra, the Economic Times reported, citing people close to the development. BT is expecting $800 million for the stake, the report said.