India’s benchmark stock index rose yesterday, tracking gains in European equities, as the biggest drop in three weeks lured investors and after the weather bureau said monsoon rains may cover the entire nation sooner than expected. Tata Motors Ltd, the owner of Jaguar Land Rover, climbed 2.4% to the highest in two weeks, pacing gains among other auto stocks. Larsen & Toubro Ltd, the largest engineering company, gained 2%, and cigarettes-to-hotels group ITC Ltd jumped 2.7%, the most since June 29. The BSE India Sensitive Index, or Sensex, rose 1.3% to 17,618.35, its highest close since March 15. The gauge lost 0.7% on Monday, the steepest loss since June 18. Monsoon rains, the main source of irrigation for India’s 235mn farmers, may cover the entire country in 24 hours, sooner than the usual July 15 date, the weather office said. Bumper crops stoke demand for vehicles, consumer goods and appliances. “Investors sought bargains after yesterday’s declines,” Jitendra Panda, head of sales broking at Mumbai-based Future Capital Holdings Ltd, said by phone. “The news on the monsoon too helped lift sentiment.” Stocks also rose as euro-area finance chiefs made progress on finalising Spain’s bailout. European governments will jump-start as much as €100bn in loans to shore up Spain’s banks, Luxembourg Prime Minister Jean-Claude Juncker said in Brussels. The region is India’s largest trading partner. The 30-stock Sensex has climbed 14% this year and is valued at 13.8 times estimated profits, compared with 10.2 times for the MSCI Emerging Markets Index. Tata Motors climbed for a fourth day, gaining 2.4% to Rs246.50, its highest level since June 26. Maruti Suzuki India Ltd, the country’s largest carmaker, jumped 2.8% to Rs1,220.55 and motorcycle-maker Hero MotoCorp Ltd gained 1.9% to Rs2,064.75. The rupee snapped a four-day loss after overseas investors added to holdings of the nation’s shares and exports rebounded in China and the Philippines, boosting the outlook for regional economic growth. The currency advanced 1% to 55.3950 per dollar in Mumbai, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 25 basis points, or 0.25 percentage point, to 12.25% yesterday. “The rupee is going to seek direction from fund flows, which have been supportive for the currency,” analysts at Edelweiss Financial Advisors, including Mumbai-based Vinay Khattar, wrote in a research note yesterday. The meeting of euro zone finance ministers “will decide the short-term fate of the currency markets,” they said. from gulf times.