Indian stocks rose, with the benchmark index capping the best annual gain among the four- largest emerging markets, as technology and drug stocks rallied on speculation overseas demand will improve.

Dr Reddy’s Laboratories Ltd. led a gauge of health-care companies to a 0.4 percent gain. Tata Consultancy Services Ltd., the country’s largest software exporter, rose 0.7 percent to extend its best annual performance in four years. Apollo Tyres Ltd. climbed to a record after Cooper Tire & Rubber Co. said it’s dropping plans to be bought by the Indian company.

The benchmark S&P BSE Sensex advanced 0.1 percent to 21,170.68 at the close in Mumbai. India’s biggest drugmakers and technology companies, which get most of their sales from abroad, posted the five-largest gains on the Sensex in 2013 as an 11 percent decline in the rupee and growth in developed economies boosted the outlook for exporters.

“Hopes of a faster U.S. economic revival are fueling a rally in drug and software exporters,” Anita Gandhi, executive director at Arihant Capital Markets Ltd. in Mumbai, said by phone. “Funds are buying to boost their portfolios before the year end.”

The Sensex has risen 9 percent in 2013. It trades at 13.6 times projected earnings for the next 12 months, compared with the MSCI Emerging Markets Index’s 10.5 times.