Economy forecast spurs Sensex to touch 14,643 pts

Economy forecast spurs Sensex to touch 14,643 pts
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First Published: Thu, Feb 08 2007. 12 47 AM IST
Updated: Thu, Feb 08 2007. 12 47 AM IST
The Sensex rose to a record high after the government forecast that the economy may expand at a record pace in the year ending 31 March, as manufacturing growth climbs to an all-time high to meet surging consumer demand.
“The confidence in growth is positive,” said Sanjay Dongre, who manages about $1 billion (Rs100 crore) in stocks at UTI Asset Management Co. in Mumbai. “Though valuations appear on the higher side, it’s being balanced out by high growth.”
ICICI Bank Ltd, India’s biggest lender by market value, gained after raising its benchmark lending rate, following the country’s central bank’s move to increase its key rate.
The Sensex rose 164.94 points, or 1.1%, to a record 14,643.13. The index surpassed the record close on 5 February.
The S&P/CNX Nifty Index on the National Stock Exchange added 28.35, or 0.7%, to 4224.25.
Bajaj Auto, India’s second-biggest motorcycle maker, rose Rs254.85, or 9%, to 3,080.3, its biggest gain since 15 June. Larsen & Toubro Ltd, the nation’s biggest engineering company, added Rs43.25, or 2.5%, to 1,744.15.
India’s $854 billion economy is forecast to grow 9.2%, after expanding 9% in the previous year, the Central Statistical Organization said in a statement in New Delhi.
Manufacturing may grow 11.3% in the year to 31 March, today’s report said, the fastest pace on record.
ICICI Bank added Rs25, or 2.6%, to 982.35. The lender raised its benchmark lending rate by 1 percentage point to 14.75%, the second increase since December. It will also raise the floating rate on home loans by 1 percentage point to 11.75%.
“ICICI Bank is demonstrating price leadership in a rate-sensitive period,” Sachin Sheth, a Mumbai-based analyst at JPMorgan, said in a note to clients late on Tuesday. Stay invested in the bank as the move to raise rates shows its proactive stance in maintaining a balance between margins and growth, Sheth said in the note.
The following shares rose or fell:
Akruti Nirman Ltd climbed Rs24, or 4.4%, to Rs564 on its trading debut. The Indian real-estate developer sold 6.7 million shares at Rs540 apiece, attracting demand for 81 times the stock on offer in its initial share sale. The company will use the Rs360 crore raised to buy land and complete projects.
Bharat Electronics Ltd surged Rs164.2, or 11%, to Rs1,671.7, extending Tuesday’s 7% jump. Northrop Grumman Corp., the third-largest US defence contractor, and state-run Bharat Electronics plan to sign a preliminary accord to explore joint production in aerospace and defence electronics technology for Indian and overseas markets.
Cambridge Technology Enterprises Ltd surged Rs61.95, or 163%, to Rs99.95 on its first day of trading. The money will finance the company’s plans for acquisitions and expanding overseas facilities.
Lupin Ltd gained Rs18.85, or 3.1%, to 635.1. The Indian drugmaker received approval from the US Food & Drug Administration to sell a version of Pfizer Inc.’s antidepressant medicine Zoloft, the Mumbai-based company statement said.
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First Published: Thu, Feb 08 2007. 12 47 AM IST
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