Indices rise most in seven weeks on GDP forecast

Mumbai: India's benchmark stock index rose the most in seven weeks after Finance Minister Pranab Mukherjee said economic growth may accelerate at a faster pace.

Hindalco Industries Ltd, the biggest aluminum maker, led gains among producers on expectations that higher growth will boost sales for metals. ICICI Bank Ltd, the second-biggest lender, rose 4.5 per cent on expectations that loan demand may increase. Mukherjee said the economy may expand as much as 8 per cent in the year ending March. The government said in November the economy may grow 6.5 per cent.

"It appears the finance minister's statement on GDP growth has been taken positively by the market," said A.N. Sridhar, a fund manager at Sahara Asset Management Co in Mumbai. "When there is hope for growth in the economy, it would be prudent for the government and Reserve Bank of India to look out for other avenues other than rate increase to curb inflation."

The Bombay Stock Exchange's Sensitive Index, or Sensex, added 539.11, or 3.2 per cent, to 17,231.11 at the close in Mumbai, the most since November 4. The S&P CNX Nifty Index on the National Stock Exchange rose 3.2 per cent to 5,144.60. The BSE 200 Index increased 2.7 per cent to 2,155.46.

Hindalco jumped 7.7 per cent to Rs153.4. Sterlite Industries (India) Ltd, the No 1 copper and zinc producer, gained 5.1 per cent to Rs847.7. Tata Steel Ltd, the biggest producer of the alloy, climbed 4.7 per cent to Rs604.05.