Most Indian stocks advanced as the rupee strengthened and gains in European equities eased concern on the region’s debt crisis.
State Bank of India (SBIN), the nation’s biggest lender, climbed to a two-week high. Tata Steel Ltd. (TATA), the largest producer, paced advances among its peers. The BSE India Sensitive Index (SENSEX) rose 0.1 percent to 16,230.32, according to preliminary closing prices in Mumbai. Three stocks rose for every two that dropped.
The Sensex jumped 1.7 percent yesterday, the most since March 30, on speculation the government will take more steps to narrow its budget deficit after allowing the first increase in gasoline prices in seven months. European stocks climbed today after Italian Prime Minister Mario Monti said most European Union leaders support joint bonds for the euro area.
“We had a big rally yesterday and a further up move from here will depend on government policies and news from Europe,” Gajendra Nagpal, chief executive officer at Unicon Financial Intermediaries in New Delhi, said by phone. “If the government increases diesel prices, it may spark a rally.”
The rupee strengthened 0.3 percent to 55.5013 a dollar at 3:32 p.m. after falling 0.8 percent intraday.
Finance Minister Pranab Mukherjee has pledged to restrict the subsidy program that spans diesel to fertilizers to less than 2 percent of gross domestic product this fiscal year as he tackles a gap in finances. State refiners sell diesel, cooking gas and kerosene at below market rates to help curb inflation. Diesel prices have remained unchanged since July 1. A group of ministers will meet today to discuss raising diesel and cooking gas prices, the CNN-IBN channel reported May 23, citing no one.
Foreign funds sold a net $57.2 million of Indian stocks on May 23, paring their investment in equities this year to $8.6 billion, data from the regulator show. They withdrew a net $168 million from shares this month, after turning net sellers in April for the first time in 2012, data from the regulator show.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Darren Boey at email@example.com