Mumbai: India’s benchmark stock index rose for a third day on Tuesday as HDFC Bank Ltd led lenders higher after a government adviser said the central bank may cut interest rates to spur the economy.
HDFC Bank climbed 3% after Prime Minister Manmohan Singh’s top economic adviser, Suresh Tendulkar, on Monday said rates may be lowered after the government announces the interim budget on 16 February. He also hinted at a new raft of stimulus measures. State Bank of India (SBI) added 1.4%.
“There are expectations of a rate cut,” said Ajay Bodke, who helps manage about $1 billion (Rs4,870 crore) in equities at IDFC Asset Management Co. Ltd in Mumbai. “We may see some stimulus measures that could be announced in the vote-on-account of the budget.”
The Bombay Stock Exchange’s (BSE) Sensex rose 63.58 points, or 0.7%, to 9,647.47. The S&P CNX Nifty index on the National Stock Exchange (NSE) climbed 14.60 points, or 0.5%, to 2,934.50.
Tax cuts would be desirable to spur demand, Tendulkar said, without elaborating. The government has already announced a $4 billion plan to invest in roads and ports, and on 2 January increased the overseas investment limit in the local corporate bond market to soften the impact of recession on India’s economy.
HDFC Bank added 3% to Rs947. SBI rose 1.4% to Rs1,164.10. The share prices are composite of BSE and NSE rates.
Sterlite Industries (India) Ltd fell 0.7% to Rs278.40. Hindalco Industries Ltd declined 2.2% to Rs44.95. Tata Steel Ltd slid 1.4% to Rs196.85.
Copper and aluminium declined in London as the global economic slowdown reduced demand for industrial metals used in buildings and cars. Copper for delivery in three months fell 1.3%, to $3,532 a tonne, as of 9.39am on the London Metal Exchange. Aluminium declined 1.2% to $1,427.25 a tonne.
Oil and Natural Gas Corp. Ltd fell 1% to Rs717.45. The company has disputed an income-tax demand for Rs6,000 crore.
Railway equipment maker Texmaco Ltd, railroad construction services company Kalindee Rail Nirman (Engineers) Ltd and Titagarh Wagons Ltd, which makes railroad cars, gained ahead of a vote on the country’s rail budget on 13 February, on expectations of winning new orders.
Texmaco gained Rs2.90, or 5.4%, to Rs56.80. Kalindee Rail added Rs10.20, or 6.9%, to Rs157.50. Titagarh Wagons rose Rs30.60, or 14%, to Rs242.10.