Sensex up 2.3%, capping best month in 17 years

Sensex up 2.3%, capping best month in 17 years
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First Published: Fri, May 29 2009. 09 48 PM IST
Updated: Fri, May 29 2009. 09 48 PM IST
Mumbai: The Bombay Stock Exchange’s (BSE) sensitive index rose on Friday, capping its best month in 17 years, after a government report showed faster-than-expected economic growth last quarter. The rupee rallied.
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DLF Ltd. jumped 9% and Larsen and Toubro Ltd (L&T) added nearly 4%. Gross domestic product (GDP) expanded 5.8% in the three months to 31 March 2009, beating the 5% median economist forecast in a Bloomberg survey.
“There is reason to be optimistic for investors as this can be taken to mean the economy is on a rising growth path,” said Murthy Nagarajan, who manages the equivalent of $181 million (Rs856 crore) in Indian assets at Mirae Asset Global Investments in Mumbai.
The Sensex added 329.24 points, or 2.3%, to 14,625.25. The S&P CNX Nifty index on the National Stock Exchange (NSE) added 111.85 points, or 2.6%, to 4,448.95.
The rupee advanced 0.8% to 47.23, the biggest gain since 18 May. It gained 6% in May, the most since 1973, according to Bloomberg data.
Overseas investors have bought $3.7 billion of more local equities than they sold this year. Inflows accelerated on speculation the Congress government, with almost twice as many seats as the main Opposition, may reduce barriers to foreign investment in insurers and retailers, plans that had been blocked by its former communist allies.
The Sensex has surged 28% in May, its biggest monthly gain since March 1992, when the index climbed 51%. Gains were boosted by a 17% rally on 18 May, the first day of trading after the ruling Congress party’s biggest election victory in two decades.
DLF jumped 9% to Rs406.50, the highest since 22 September. L&T rose 4.2% to Rs1,402.20, the highest in more than nine months.
Mahindra and Mahindra Ltd gained 5% to Rs668.90. The company reported during late trading on Thursday a better-than-estimated 89% surge in fourth quarter profit.
State-owned Indian Oil Corp. Ltd (IOC) led gains by refiners after oil minister Murli Deora said that he will seek cabinet approval to free fuel prices from government control.
“The government has taken notice and is working on a proposal,” said Deora, who was re-appointed oil minister on Thursday.
He said: “We will take it up to the cabinet in six weeks.”
IOC gained 6.8% to Rs609. Bharat Petroleum Corp. Ltd climbed 3.7% to Rs464.70, while Hindustan Petroleum Corp. Ltd added 8.4% to Rs362.95.
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First Published: Fri, May 29 2009. 09 48 PM IST