Indian shares rise on back of stimulus plan

Mumbai: Indian shares rose, led by ICICI Bank Ltd, after acting Finance Minister Pranab Mukherjee said the government will announce additional measures to arrest the economic slowdown.

ICICI Bank, the nation's second biggest, rose 4.2 per cent, gaining for the second day. Reliance Industries Ltd, the biggest non-state company, advanced 4.4 per cent after a report that new oil drilling rigs will be delivered this year, raising speculation they will boost earnings.

"Every government from Russia to Japan to the United States is doing something or the other to prop up the economy, which should at least stop them from slowing further," said Mumbai-based P.R. Dilip, managing director at Impetus Wealth Management Ltd.

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 209.98, or 2.3 per cent, to 9,300.86 at the 3.30pm local time close.

The S&P CNX Nifty Index on the National Stock Exchange advanced 63.05, or 2.3 per cent, to 2,843.10. The BSE 200 Index gained 22.39, or 2.1 per cent, to 1,091.22.

ICICI Bank rose 4.2 per cent to Rs407.1 (Dh30.79). Reliance Industries gained 4.4 per cent to Rs1,344.85.

India, where the economy may grow by about seven per cent in the year ending March 31, will take steps aimed at protecting labour-intensive industries, Mukherjee said yesterday.

The government has so far announced two stimulus packages including tax cuts and capital injections for banks.

Automobile shares climbed as sales increased on lower interest rates. Tata Motors Ltd, the biggest truck-maker in the country, surged 4.9 per cent, to 137.50, the most in more than a month. Mahindra & Mahindra Ltd, the nation's biggest sport-utility vehicle maker, rose 3.4 per cent to Rs274.65.

Satyam Computer Services Ltd rose, halting a three-day slide, following the appointment of A.S. Murty as the fraud-hit company's chief executive officer.

Maruti Suzuki rose 0.1 per cent to Rs577.70. Easier credit led Maruti to higher sales in India last month and may help revive auto demand in the world's second-fastest growing major economy.

That contrasts with plummeting sales in Suzuki's home market of Japan and in the United States.

Jain Irrigation Systems Ltd fell Rs2.95, or 0.9 per cent, to Rs315.10. India's largest irrigation company expects revenue to grow at least 30 per cent in the year starting April 1, The Financial Express reported.

Maytas Infra Ltd shed Rs3, or five per cent, to Rs57.10. The company controlled by the family of arrested Satyam Computer Services Ltd founder Ramalinga Raju, fell by the five per cent limit for the 21st-straight day, to Rs57.10.

It has sent a legal notice to Vedanta Aluminium Ltd. for "illegally encashing" its bank guarantees.

Vedanta Aluminium converted to cash two bank guarantees worth Rs640 million on January 20.

Vishal Retail Ltd rose Rs2.50, or five per cent, to Rs52.25.

The company will open as many as 12 stores in two months and denied media report that it will close about a third of its shops.

Mumbai (Bloomberg) India's rupee advanced for a second week as stock gains increased optimism overseas funds will return to buy emerging-market assets.

The currency appreciated for a fourth day, its best run in more than a month, as offshore non-deliverable forward contracts showed traders reduced bets for how far the rupee will decline in a month. The MSCI Asia Pacific Index of stocks climbed for a second week and India's benchmark index rose to a one-week high.

"The global equity markets appear to be less volatile which will help the rupee," said Vikas Babu, a currency trader at state-owned Andhra Bank in Mumbai.

"I expect flows into India to rise and the rupee to advance in the near term."

The rupee strengthened 0.4 per cent this week to Rs48.695 a dollar at the 5pm close in Mumbai, the highest since January 19.