Indian Stocks Advance Most in Three Weeks on Greek Aid Agreement
Indian stock advanced the most in three weeks after an official from the European Union, India’s largest trading partner, said an agreement had been reached on Greece’s debt burden.
The BSE India Sensitive Index (SENSEX), or Sensex, gained 1 percent to 18,6726.52 at 9:41 a.m. in Mumbai All 10 industry groups climbed on the MSCI India index. Sterlite Industries (India) Ltd. (STLT), the biggest copper producer, and drugmaker Dr Reddy’s Laboratories Ltd. (DRRD) climbed 1 percent each. The markets are closed tomorrow for a public holiday.
International Monetary Fund Managing Director Christine Lagarde told reporters her aim to get Greece’s debt on a “sustainable path” was achieved today after more than 12 hours of talks. The European Union accounted for 17.2 percent of India’s exports in the six months ended September 2011, according to the commerce ministry.
“The European deal will spur risk-on trade and Indian markets will open higher,” Arun Kejriwal, director at Kejriwal Research & Investment Services Pvt., said by telephone today. “However, the parliament session will be keenly watched.”
Stocks gained even as the Indian government struggled to reach an agreement with opposition parties on plans to woo foreign retailers, part of a package of reforms to spur growth in an economy that probably expanded at the weakest pace since 2009 in the quarter ended September.
Gross domestic product increased 5.2 percent in the three months ended Sept. 30 from a year earlier, the median of 26 estimates in a Bloomberg survey shows, before a report due Nov. 30, as elevated inflation and subdued investment add pressure on Prime Minister Manmohan Singh to push through the biggest opening of the economy to foreign investment in a decade.
The Sensex has rallied 20 percent this year, driven by foreign inflows and government policy reforms. The gauge is the best performer this year among benchmark measures in nations with at least $1 trillion in market value, according to data compiled by Bloomberg.
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