Sensex advances; banks, cement firms lead gains

Sensex advances; banks, cement firms lead gains
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First Published: Tue, Feb 03 2009. 09 06 PM IST
Updated: Tue, Feb 03 2009. 09 06 PM IST
Mumbai: India’s benchmark stock index rose on Tuesday, led by banks, after Macquarie Group Ltd forecast interest rate cuts that will trigger economic recovery.
ICICI Bank Ltd rose 1.8%. HDFC Bank Ltd added 1.1%. ACC Ltd rose 4.9%.
“Aggressive monetary easing will drive lending and deposit rates down by 200-300 basis points over the next two quarters,” Seshadri Sen, an analyst at Macquarie, said in a note to clients on Tuesday. “This could trigger a mild economic recovery in the second half of the year ending March 2010.”
The Bombay Stock Exchange’s (BSE) Sensex rose 82.60 points, or 0.9%, to 9,149.30. The S&P CNX Nifty index on the National Stock Exchange (NSE) added 17.25 points, or 0.6%, to 2,783.90.
“Lower valuations make banks, cement producers and auto makers relatively attractive,” Sen said.
HDFC Bank added 1.1% to Rs898.20. ICICI gained 1.8% to Rs392. Maruti Suzuki India Ltd, gained 3% to Rs583.75. The share prices are composite of BSE and NSE rates.
ACC rose 4.9% to Rs518.75. Grasim Industries Ltd jumped 6.9% to Rs1,273.25. Both stocks rose the most since 6 January. ACC said January cement sales climbed 13% from a year ago, while Grasim and its unit sold 7.4% more than the same period last year.
DLF Ltd dropped Rs20.15, or 13%, to Rs132.85, extending Monday’s 14% decline. The company had its stock rating cut to “underperform” from “outperform” at Macquarie Group Ltd.
Educomp Solutions Ltd fell Rs221.35, or 13%, to Rs1,483.95. India’s biggest computer training company by market value declined after PTI said the government was investigating it.
“The company hasn’t received any official information about an inquiry into Educomp’s accounts and it would welcome any such investigation,” chairman Shantanu Prakash said in a phone interview on Tuesday.
Mahindra and Mahindra Ltd slid Rs3, or 1%, to Rs288.75. The auto maker said sales in January fell 21%. Sales of cars, sport utility vehicles, trucks and three-wheeled vehicles reached 17,611 units last month in India and overseas, compared with 22,309 units a year earlier, the company said.
Tata Motors Ltd fell Rs10.55, or 7.3%, to Rs133.20, the most since 24 December. The company said vehicle sales fell 33% in January. Commercial and passenger vehicle sales in India and overseas dropped to 36,931 units last month, from 54,796 units a year earlier.
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First Published: Tue, Feb 03 2009. 09 06 PM IST
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