Business | Markets
Indian shares rally 3.7% as rupee gains
Indian shares rose 3.7 per cent yesterday to their highest close in five weeks, after inflation dropped to a nine-month low and the government unveiled a bigger spending plan to stimulate the economy.
- Reuters
- Published: 23:45 December 18, 2008
Mumbai: Indian shares rose 3.7 per cent yesterday to their highest close in five weeks, after inflation dropped to a nine-month low and the government unveiled a bigger spending plan to stimulate the economy.
Financial stocks such as State Bank of India and ICICI Bank led the surge as inflation, which fell to below 7 per cent, boosted prospects for deeper interest rate cuts in coming weeks, analysts said.
"I think the RBI will go for aggressive moves. I expect a rate cut either this month or early January," said D.K. Joshi, principal economist at rating agency Crisil, referring to the Reserve Bank of India.
The 30-share BSE index rose 361.14 points to 10,076.43, its best close since November 10. It had seesawed in the morning falling nearly 1 per cent as energy firms fell with oil treading water at near four-year lows.
The Indian rupee ended at its highest in nearly 1-1/2 months yesterday, as a rally in local shares raised expectations of more capital inflows and dollar weakness supported sentiment.
The partially convertible rupee ended at 46.95/96 per dollar.
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