Business | Markets
India's main index surges 3.7% on easing inflation
Sensex posts its first weekly gain in three by climbing 1.1%.
- Bloomberg
- Published: 23:53 August 29, 2008
Mumbai: India's benchmark stock index rose the most in more than a month after the US economy grew faster than estimated and India's inflation eased, lowering concern rising prices will crimp consumer spending.
ICICI Bank, the nation's second-biggest bank by assets, added 6.2 per cent. HDFC Bank, the third-largest, rose 5.2 per cent. Both stocks rose the most in four weeks.
"The GDP numbers from the US and inflation coming in lower than expected has brought some relief to the market," said Jayesh Shroff, who helps manage about $3.5 billion at SBI Asset Management in Mumbai.
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 516.19, or 3.7 per cent, to 14,564.53, the most since July 23. It was the biggest gainer among Asia's main bourses. The benchmark posted its first weekly gain in three climbing 1.1 per cent.
The S&P CNX Nifty Index on the National Stock Exchange added 146, or 3.5 per cent, to 4,360.
US stocks climbed the most in three weeks after the Commerce Department said gross domestic product grew at a 3.3 per cent annual rate. The US government's initial estimate of economic growth was 1.9 per cent last month and economists in a Bloomberg survey on average projected 2.7 per cent. The data follows an unexpected advance in durable goods orders that helped boost stocks on Thursday.
India's inflation rose 12.40 per cent in the week to August 16, the government said yesterday after the close of markets. Economists were expecting a 12.78 per cent gain. Inflation easing may decrease the likelihood the central bank will raise interest rates for a fourth time since June.
Expansion
Yesterday, the government said the economy expanded 7.9 per cent in the three months to June 30 from a year earlier. Analysts expected gross domestic product to increase 8 per cent.
ICICI rose to Rs671.90. HDFC Bank climbed to Rs1,276.70. Both stocks gained the most since August 5. State Bank of India, the nation's largest lender, advanced 7.2 per cent to Rs1,403.85, the most since July 23. HDFC, the biggest mortgage lender, added 4.3 per cent to Rs2,343.50, the most since August 1.
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