Index rises to highest in two-and-a-half years

Mumbai: India's benchmark stock index extended gains for a second day to the highest level in more than two-and-a-half years amid expectations domestic companies will benefit from spending aimed at bolstering the US economy.

Jindal Steel & Power Ltd, India's second-largest steelmaker by market value, led metal producers higher after US President Barack Obama proposed a $50 billion (Dh184 billion) spending plan. Idea Cellular Ltd jumped to its highest in a month after etisalat said it may invest in the phone company.

Gains

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 85.01, or 0.5 per cent, to 18,645.06, its highest close since February 2008. The S&P CNX Nifty Index on the National Stock Exchange gained 0.5 per cent to 5,604.00. The BSE 200 Index added 0.4 per cent to 2,392.88.

"With the domestic growth outlook intact, the US plan stands to benefit local companies by boosting demand and appetite for riskier assets like stocks," said R.K. Gupta, a fund manager at Taurus Asset Management in New Delhi, who declined to say how much he manages or what he's buying and selling.

Jindal Steel gained 1.8 per cent to Rs707.95. Obama on Monday called for a six-year programme to fix roads, railways and modernise the air-traffic control system. Steel Authority of India Ltd, the nation's second-biggest producer of the alloy, rose 1.1 per cent to Rs197.7, its highest level in a month.