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Indian stocks rise 0.7% on rate cut expectations

Indian stocks rose for a third day as HDFC Bank Ltd led lenders higher after a government adviser said the central bank may cut interest rates to spur the economy

  • IANS
  • Published: 23:04 February 10, 2009
  • Gulf News

Mumbai: Indian stocks rose for a third day as HDFC Bank Ltd led lenders higher after a government adviser said the central bank may cut interest rates to spur the economy.

HDFC Bank, the country's third-largest, climbed three per cent after Prime Minister Manmohan Singh's top economic adviser, Suresh Tendulkar, said on Monday rates may be lowered after the government announces the interim budget on February 16. He also hinted at a new raft of stimulus measures. State Bank of India, the biggest lender, added 1.4 per cent.

"There are expectations of a rate cut," said Ajay Bodke, who helps manage about $1 billion (Dh3.678 billion) in equities at IDFC Asset Management Co. in Mumbai. "We may see some stimulus measures that could be announced in the vote on account of the budget."

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 63.58, or 0.7 per cent, to 9,647.47. The S&P CNX Nifty Index on the National Stock Exchange climbed 0.5 per cent to 2,934.50. The BSE 200 Index advanced 0.7 per cent to 1,128.85. S&P CNX Nifty futures for February delivery added 0.3 per cent to 2,921.10.

HDFC Bank added three per cent to Rs947. State Bank rose 1.4 per cent to Rs1,164.10.

Sterlite Industries (India) Ltd., the nation's largest copper producer, fell 0.7 per cent to Rs278.40. Hindalco Industries Ltd., India's biggest aluminum producer, declined 2.2 per cent to Rs44.95. Tata Steel Ltd, India's biggest producer of the alloy, slid 1.4 per cent to Rs196.85.

Oil and Natural Gas Corp, India's biggest exploration company, fell one per cent to Rs717.45.

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