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India stocks rise to highest in a month

Indian stocks rose to the highest in a month, led by financial companies. ICICI Bank Ltd and State Bank of India gained after Citigroup Inc said the central bank may cut interest rates in coming months.

  • Bloomberg
  • Published: 23:21 March 18, 2009
  • Gulf News

Mumbai: Indian stocks rose to the highest in a month, led by financial companies. ICICI Bank Ltd and State Bank of India gained after Citigroup Inc said the central bank may cut interest rates in coming months.

ICICI Bank Ltd, the nation's biggest non-state lender, gained 3.5 per cent to a three-week high after Citigroup analyst Rohini Malkani said the Reserve Bank of India may cut its repurchase rate by another 1 percentage point in coming months, helping to boost lending. State Bank of India rose 1.1 per cent.

The Bombay Stock Exchange's Sensitive Index, or Sensex, climbed 112.86, or 1.3 per cent, to 8,976.68. The S&P CNX Nifty Index on the National Stock Exchange added 1.4 per cent to 2,794.70. The BSE 200 Index advanced 1.3 per cent to 1,053.64.

Rates are likely to be cut "in the next financial year to help boost some industries that are struggling," said U.P. Bhat of Canara Robeco Asset Management Co in Mumbai.

ICICI Bank gained 3.5 per cent to 334.65 rupees. State Bank of India rose 1.1 per cent to 960.30 rupees.

The Reserve Bank may pare its repurchase rate further after lowering it by 4 percentage points since October, Citigroup's Malkani said.

"With both investment and consumption coming off, continued policy action is necessary to stem the deceleration in growth," Malkani said in the note.

Citigroup forecasts India's growth to drop to 5.5 per cent in the year ending March 2010, from 7.1 per cent estimated by the government for the year ending March 31.

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