May 28 (Bloomberg) -- India's benchmark stock index rose to the highest in more than a week after UBS AG and Standard Chartered Plc said the economy is showing signs of recovery. Larsen & Toubro Ltd. and Bharti Airtel Ltd. led gains.
Larsen & Toubro, the country's largest engineering company, added 2.6 percent while Bharti Airtel, the No. 1 mobile-phone operator, climbed 3.5 percent. Reliance Industries Ltd., India's biggest company by market value, advanced 1.6 percent after its partner estimated their gas reserves were higher than expected.
"Things are looking better," said Navneet Munot, chief investment officer at SBI Funds Management Ltd. in Mumbai, who oversees the equivalent of $7.3 billion in assets. "The economy will pick up. We are on the right track."
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 186.37, or 1.3 percent, to 14,296.01, the highest since May 19. The S&P CNX Nifty Index on the National Stock Exchange added 1.4 percent to 4,337.10. The BSE 200 Index increased 1 percent to 1,733.08.
India's economy is showing signs of a rebound as interest- rate cuts encourage spending and foreign investors return, UBS and Standard Chartered said.
Larsen & Toubro climbed 2.6 percent to 1,345.70 rupees, extending yesterday's 4.7 percent advance. Bharti rose 3.5 percent to 795.90 rupees, the first gain in four days.
Reliance advanced 1.6 percent to 2,220.55 rupees as it may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field, partner Hardy Oil & Gas Plc said.
Bharti, Larsen & Toubro
Still, the country's credit rating may come under pressure if Prime Minister Manmohan Singh's government is unable to rein in a widening budget deficit, Moody's Investors Service said today.
Asia's third-biggest economy is forecast to expand 6.2 percent in the year ending March 2010, compared with an earlier prediction of 5.2 percent, UBS said this week, adding in a report yesterday that a consumption recovery "should be months away."
Standard Chartered economist Anubhuti Sahay said in a report yesterday that risks to the bank's 5 percent forecast for the same period were now "to the upside."
India's inflation rate held below 1 percent for an 11th straight week, giving policy makers room to take steps to buoy a slowing economy. Wholesale prices rose 0.61 percent in the week to May 16 from a year earlier, matching the gain of the previous week, the government said in New Delhi today.
Low inflation has allowed Reserve Bank of India Governor Duvvuri Subbarao to cut borrowing costs six times since October to boost the $1.2 trillion economy, forecast to grow this year at the slowest pace since 2003.
Indiabulls Real Estate Ltd. jumped 11 percent to 225.70 rupees, the highest in eight months, after MSCI Barra said the stock will be included in its global equity indexes following a sale of new shares. Indiabulls will be added to the mid-cap segment of the MSCI Global Standard Indices from June 1.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
Larsen & Toubro, the country's largest engineering company, added 2.6 percent while Bharti Airtel, the No. 1 mobile-phone operator, climbed 3.5 percent. Reliance Industries Ltd., India's biggest company by market value, advanced 1.6 percent after its partner estimated their gas reserves were higher than expected.
"Things are looking better," said Navneet Munot, chief investment officer at SBI Funds Management Ltd. in Mumbai, who oversees the equivalent of $7.3 billion in assets. "The economy will pick up. We are on the right track."
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 186.37, or 1.3 percent, to 14,296.01, the highest since May 19. The S&P CNX Nifty Index on the National Stock Exchange added 1.4 percent to 4,337.10. The BSE 200 Index increased 1 percent to 1,733.08.
India's economy is showing signs of a rebound as interest- rate cuts encourage spending and foreign investors return, UBS and Standard Chartered said.
Larsen & Toubro climbed 2.6 percent to 1,345.70 rupees, extending yesterday's 4.7 percent advance. Bharti rose 3.5 percent to 795.90 rupees, the first gain in four days.
Reliance advanced 1.6 percent to 2,220.55 rupees as it may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field, partner Hardy Oil & Gas Plc said.
Bharti, Larsen & Toubro
Still, the country's credit rating may come under pressure if Prime Minister Manmohan Singh's government is unable to rein in a widening budget deficit, Moody's Investors Service said today.
Asia's third-biggest economy is forecast to expand 6.2 percent in the year ending March 2010, compared with an earlier prediction of 5.2 percent, UBS said this week, adding in a report yesterday that a consumption recovery "should be months away."
Standard Chartered economist Anubhuti Sahay said in a report yesterday that risks to the bank's 5 percent forecast for the same period were now "to the upside."
India's inflation rate held below 1 percent for an 11th straight week, giving policy makers room to take steps to buoy a slowing economy. Wholesale prices rose 0.61 percent in the week to May 16 from a year earlier, matching the gain of the previous week, the government said in New Delhi today.
Low inflation has allowed Reserve Bank of India Governor Duvvuri Subbarao to cut borrowing costs six times since October to boost the $1.2 trillion economy, forecast to grow this year at the slowest pace since 2003.
Indiabulls Real Estate Ltd. jumped 11 percent to 225.70 rupees, the highest in eight months, after MSCI Barra said the stock will be included in its global equity indexes following a sale of new shares. Indiabulls will be added to the mid-cap segment of the MSCI Global Standard Indices from June 1.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
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