Indian Stock Rise on Optimism Government to Support Rupee
Indian stocks advanced for a second day on optimism Prime Minister Manmohan Singh will take steps to stem the rupee’s slide and revive a faltering economy after he took charge today of the government’s finance portfolio,.
Infosys Ltd., the second largest software exporter, rose the most in two weeks. HDFC Bank Ltd. (HDFCB), the second-biggest lender by market value, climbed to a two-week high. ITC Ltd. (ITC), the largest tobacco company, gained for the first time in four days. The BSE India Sensitive Index (SENSEX) added 0.3 percent to 16,959.05, according to preliminary closing prices in Mumbai. The gauge is bound for its first quarterly loss since the three-month period ended in December.
Finance Minister Pranab Mukherjee resigned from his post yesterday to contest presidential polls, leaving Singh with an economy hobbled by slowing growth, elevated trade and budget deficits and in-fighting that has stymied efforts to attract investments. Mukherjee’s attempts this week to halt a slump in the rupee by allowing foreign funds to buy more bonds fizzled, leaving the currency close to its record low.
Singh will head the finance ministry until Mukherjee’s successor is named, Pankaj Pachauri, communications adviser to the prime minister’s office, said yesterday. Singh was finance minister in the 1990s, sparking an economic turnaround that now faces one of its sternest tests.
Overseas funds sold a net $33.8 million of domestic stocks on June 25, paring their investment this year to $8.6 billion rupees, data from the market regulator show. They cut holdings by $273 million in May, a second month of net sales.
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