The index of leading indicators rose 0.9 percent in December, the strongest gain in four months, the Commerce Department reported yesterday.

Higher stock prices, an increase in the number of building permits issued and a longer factory workweek were the major reasons for the gain in the index, whose movements often foreshadow changes in overall economic activity. Seven of the 12 indicators in the composite index rose, 4 fell and 1 is not yet available, the department said.

For the fourth quarter as a whole, the index rose 1.6 percent, up slightly from a 1.5 percent gain in the third quarter. These increases are a strong sign that the economy will continue to grow in coming months, but they do not suggest a sharp acceleration in economic activity, analysts said.

On the basis of more complete data, the November increase in the index was revised upward from 0.4 percent to 0.6 percent. The October rise was revised from 0.1 percent to 0.2 percent.

Among the indicators falling in December were those for net business formation, the level of initial claims for unemployment insurance -- an increase in claims is a negative factor -- and new orders for consumer goods, adjusted for inflation.

A separate index of coincident indicators, which is intended to reflect current economic conditions, rose 1.1 percent. The coincident index rose 0.4 percent in November after falling 0.1 percent in October.

An index of lagging indicators rose 0.4 percent in December after a 0.1 percent decline in November and a strong 1.5 percent rise in October.