Mumbai: Indian stocks rose in U.S. trading after Prime Minister Manmohan Singh’s coalition won a showdown in parliament, fueling speculation that he may be able to introduce laws to attract foreign investment.
Singh’s Congress Party-led coalition won enough votes for a majority in the 541-member lower house of parliament, speaker Somnath Chatterjee said. Singh had to demonstrate his strength after his communist allies, seeking to block a nuclear energy accord with the U.S., withdrew their support to the four-year-old coalition government.
ICICI Bank Ltd., India’s second biggest, rose 5.6% to $31.65 at 10:56 a.m. in U.S. trading, after Indian markets closed. HDFC Bank Ltd., the third largest, climbed 2.8 percent. Infosys Technologies Ltd., the country’s second-largest computer-services exporter, and smaller rival Wipro Ltd. also gained.
The stock market has surged more than fourfold in the first 3 1/2 years of Singh’s administration as the 75-year-old prime minister presided over an economic expansion that averaged 8.9 percent a year, the fastest since independence in 1947.
Bills to open pension management to overseas investors and remove a 10 percent cap on the voting rights of foreign investors in non-state banks, stalled in parliament, may be revived. The government has also been seeking to raise the foreign investment ceiling for insurers to 49%, from 26%, since 2006.
This year, foreign investors, who bought a record $17.2 billion of stocks in 2007, have turned sellers as the benchmark equity index lost a third of its value. The central bank expects growth in Asia’s third-largest economy may slow to 8 percent this year, dragged down by record high oil prices