Sensex continues to rise on growth prospects

Sensex continues to rise on growth prospects

Mumbai: India’s benchmark stock index rose to its highest level in more than a month amid speculation the nation’s economy is robust enough to withstand any global economic slowdown caused by Europe’s sovereign-debt crisis.

Fitch Ratings on Monday cited India’s “strong growth prospects" and the view the debt ratio will be reduced when it raised the local currency debt outlook to stable.

Reliance Communications Ltd (RCom) advanced close to a five-month high after saying it’s in “advanced talks" to sell stakes in its tower unit. Hindustan Unilever Ltd (HUL) climbed to the highest since January.

“India’s growth trajectory is intact," said Kishor Ostwal, managing director of CNI Research (India) Ltd, a listed equities research provider in Mumbai. “The fiscal deficit will go down and that’s very positive."

The Bombay Stock Exchange’s (BSE) Sensex index, added 74.66 points, or 0.4%, to 17,412.83, extending its longest string of gains in almost two months to its highest level since 30 April.

The Nifty on the National Stock Exchange added 0.5% to 5,222.35. The BSE 200 index increased 0.5% to 2,205.50.

Shares of RCom, the country’s second largest wireless carrier, climbed 4.3% to Rs186.8 each, its highest since 20 January.

The telecom operator controlled by billionaire Anil Ambani is talking with local and overseas companies for a cash and stock transaction for Reliance Infratel Ltd, according to an emailed statement on Monday.

HUL, the Indian unit of the world’s second largest consumer goods maker, advanced 1.8% to Rs260.15. ACC Ltd, the country’s No. 1 cement maker, increased 2% to Rs879.9.

Wireless airwaves

Fitch raised the outlook for local currency debt from negative, citing the view that the government’s debt-to-gross domestic product ratio will decline as it uses higher-than-expected revenue from the auction of wireless airwaves to reduce its budget deficit.

India’s economic growth will accelerate to at least 8.5% in the year ending March, buoyed by higher factory output, finance minister Pranab Mukherjee said on Tuesday.

A measure of industrial production expanded 17.6% in April, close to a record set in December, an 11 June government report showed.

Hindustan Copper Ltd gained 9.1% to Rs512.6, the highest since 26 April. The government will sell a 10% stake in the copper producer followed by a company offering of a further 10%, corporate affairs minister Salman Khursheed said on Tuesday.

Overseas investors

Overseas investors bought a net Rs896 crore of Indian equities on 11 June, increasing total purchases of the stocks this year to Rs23,040 crore, according to the nation’s market regulator.

Inflows from overseas reached a record Rs83,420 crore in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years attracted foreign funds. They sold a record Rs52,990 crore of shares in 2008, triggering a record annual decline.

Balaji Telefilms Ltd, a producer of television shows, climbed 1.6% to Rs58.85. Reliance Big Entertainment Ltd, a unit of the Anil Dhirubhai Ambani Group, may buy a 26% stake in the company from Star India, VCCircle’s website said, citing people it didn’t identify.

Balaji Telefilms’ chief financial officer Sunil Shahani couldn’t immediately be reached at his office telephone for comment on the report.

BOC India Ltd, a maker of industrial gases, soared 20% to Rs286.8, its highest in at least 18 years. Linde Holdings Netherlands BV proposed delisting the company from Indian exchanges by buying shares held by public holders, according to BOC India’s stock exchange filing.

Ennore Coke Ltd, a power generator, advanced 6.8% to Rs95.4, its highest in two months, after 36.8% of its shares changed hands in two block transactions on BSE. Buyers and sellers weren’t immediately known.

MMTC Ltd, a state-run trading company, surged 21% to Rs34,533.45, the most since at least July 2002, after saying it will consider a proposal on 29 June to issue free shares and split its stock.

Orbit Corp. Ltd, a real estate company, climbed 4.6% to Rs260.7. Amit Agarwal, an analyst at Daiwa Securities Capital Markets Co. Ltd, rated the stock as buy in new coverage.