An employee looks at a computer monitor at a brokerage firm in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

India's Sensex Heads for Best Week Since 2016

(Bloomberg) -- Indian shares capped their best week since May 2016 as higher sales at the country’s biggest carmaker and a drop in crude oil prices boosted sentiment.

The key S&P BSE Sensex climbed 1.7 percent to 35,011.65 at the close in Mumbai, extending its weekly advance to 5 percent. Maruti Suzuki India Ltd., India’s top carmaker, jumped 6.3 percent, gaining for a second day after reporting an increase in sales in October. Sixteen of the 19 sub-indexes compiled by BSE Ltd. advanced, led by a gauge of automobile stocks.

India's Sensex Heads for Best Week Since 2016

Most stocks in Asia gained Friday, building on a rally in global equities, after reporting the worst returns in October in more than six years.

For more on moves to keep oil prices under check, click here

The Sensex and the NSE Nifty 50 Index, also up 1.7 percent, have declined more than 10 percent since their record close on Aug. 28. Investors were encouraged by a drop in crude oil prices that will help India narrow its trade deficit and spur economic growth. India imports more than 80 percent of its oil needs.

“Crude moves over the last month has led to a significant correction of India’s stock prices making them attractive,” said Chakri Lokapriya, chief investment officer at TCG Asset Management. The fall in the price of oil is “a huge positive for India’s deficits and inflation.”

Read more Lokapriya views (terminal only)

Stocks also received a boost this week after India’s government sought to defuse a spat with the central bank over the monetary authority’s independence in handling bank regulation, bad loans and a liquidity squeeze.

There’s more good news. Of the 38 NSE Nifty 50 Index companies that have announced results so far, 20 have either met or exceeded profit estimates.

©2018 Bloomberg L.P.