Mumbai : India's benchmark stock index rose to a two-month high yesterday, erasing its loss this year, amid optimism that global economic growth will help spur domestic demand after the US Federal Reserve pledged to keep borrowing costs near zero.
ICICI Bank Ltd, India's No. 2 lender, advanced 1.9 per cent. Larsen & Toubro (L&T) Ltd, the nation's biggest engineering company, climbed 1.7 per cent after saying it won an order worth Rs10 billion ($220.2 million, Dh809.2 million).
"Consumer demand is going to keep rising thus boosting consumption," said Saibal Ghosh, chief investment officer at Aegon Religare Life Insurance Co. in Mumbai. "The Sensex needs a cue from global markets to give it direction. US Fed rates are one of the triggers." Ghosh prefers banks and power companies.
The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 106.90, or 0.6 per cent, to 17,490.08. The gauge, advancing for a second day, erased its year-to-date losses of as much as 9.6 per cent. The S&P CNX Nifty Index on the National Stock Exchange rose 0.7 per cent to 5,231.90. The BSE 200 Index increased 0.6 per cent to 2,187.94.
ICICI Bank climbed 1.9 per cent to Rs948.55. Larsen & Toubro advanced 1.7 per cent to Rs1,626.95. The company said it won an order from Oil and Natural Gas Corp.
Foreign fund inflows into India's stock market climbed to a record Rs834.2 billion in 2009, beating the previous high set two years earlier in local currency terms.
