Bloomberg News

Indian Stocks Reach Two-Year High After U.S. Clears Budget Bill

January 02, 2013

Indian (SENSEX) stocks advanced to a two-year high as U.S. lawmakers passed legislation averting some automatic tax increases and spending cuts.

The BSE India Sensitive Index, or Sensex, rose 0.6 percent to 19,705.19, according to preliminary closing prices at 3:30 p.m., its highest close since Jan. 6, 2011. Motorcycle maker Hero Motocorp Ltd. (HMCL) climbed as December sales rose. Bharat Heavy Electricals Ltd. (BHEL), the largest Indian power-equipment maker, led industrials higher.

The U.S. House of Representatives passed the legislation, averting income tax increases for most U.S. workers after Republicans abandoned efforts to attach spending cuts that would have been rejected by the Senate. The bipartisan vote breaks a yearlong impasse over how to head off $600 billion in tax increases and spending cuts, or the so-called fiscal cliff.

The U.S. accounted for 11 percent of India’s exports in the six months ended September 2011, trade ministry data show.

To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net

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


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