Bloomberg News

Indian Stocks Advance as Economy Outlook Spurs Foreign Buying

March 02, 2012

Indian stocks climbed, paring the benchmark index’s second weekly loss, on signs the U.S. economy is strengthening, the debt crisis in Europe is easing, and as overseas investors continued an equity-buying spree.

State Bank of India and ICICI Bank Ltd. (ICICIBC), the biggest lenders, advanced amid expectation the central bank may take steps to ease a liquidity crunch. Larsen & Toubro Ltd. (LT), the largest engineering company, rose for the first time in three days. DLF Ltd. (DLFU), the top developer, sank to a six-week low after reports of probe against the company. Oil & Natural Gas Corp. (ONGC) after a government auction of shares in the country’s largest state explorer fell short of full subscription.

The BSE India Sensitive Index (SENSEX), or Sensex, rose 0.3 percent to 17,643.39, according to preliminary closing prices at 3:30 p.m. in Mumbai, after changing directions at least 22 times. The gauge fell 1.6 percent this week.

The government sold shares in ONGC to bridge a fiscal deficit, which exceeded the target for the year in the 10 months through January. The central bank had signaled that efforts to curb the gap would boost its scope to lower interest rates as growth slows. It reviews rates on March 15, a day before Finance Minister Pranab Mukherjee presents the budget. The results of an election in the most populous state next week may bolster the government’s effort to undertake reforms to boost growth.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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