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Sensex up for 10th week; bank stocks lead charge

Sensex up for 10th week; bank stocks lead charge
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First Published: Fri, May 15 2009. 10 21 PM IST
Updated: Fri, May 15 2009. 10 21 PM IST
India’s stocks rose for the 10th week on Friday, the longest winning streak in almost three years, as the ruling party said it was confident of retaining power without support from the Communists after voting in the general election closed.
ICICI Bank Ltd jumped 7.2%, leading gains among financial stocks after the central bank said it was seeking to restore economic growth. State Bank of India (SBI) increased 3.6%, while HDFC Bank Ltd added 1.8%.
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“The fundamentals of the economy are strong, and domestic institutions are waiting on the sidelines with funds,” said Manish Sonthalia, who helps oversee the equivalent of $100 million (Rs496 crore) of equities at Motilal Oswal Securities Ltd in Mumbai. “The election is the only glitch, but the market seems to have discounted that.”
The Bombay Stock Exchange’s Sensex rose 300.51 points, or 2.5%, to 12,173.42. The measure increased 2.6% in the past five days, completing its 10 weeks of gains, the longest stretch since the period ended 29 September 2006.
The S&P CNX Nifty index on the National Stock Exchange added 78.20 points, or 2.2%, to 3,671.65.
The Sensex’s gain on Friday reversed a 2.3% drop in the past two days amid concerns that the ruling Indian National Congress party would need to tie up with the Communists to form the next government. Commerce and industry minister Kamal Nath said in an interview in New Delhi on Thursday that his ruling party would be able to form the next government without that alliance.
The Communists, who want to limit foreign investment and almost brought down the government last year over a nuclear energy deal with the US, are expected to win fewer seats, according to an NDTV 24x7 exit poll. The results of the five-week long elections will be released on Saturday.
ICICI Bank gained 7.2% to Rs574.70. HDFC Bank rose 1.8% to Rs1,184.95. SBI added 3.6% to 1,313.50, a one-week high.
Reliance Industries Ltd increased 2.2% to Rs1,950.70. Larsen and Toubro Ltd rose 4.5% to Rs989, the most since 4 May.
The Reserve Bank of India (RBI) will seek to unwind monetary measures taken since September after the global financial crisis ends. “Once the crisis is behind us, managing inflationary expectations and unwinding of the current expansionary policy will be our task and our challenge,” RBI governor D. Subbarao said Bangalore on Thursday.
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First Published: Fri, May 15 2009. 10 21 PM IST
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