Jan. 28 - Indian stocks rose for a second day, driving the benchmark index to its highest in more than a week, on expectation the U.S. will form a so-called bad bank to absorb toxic assets, helping stimulate the world’s biggest economy.
Tata Consultancy Services Ltd. gained 2.3 percent, leading software developers higher, as the Obama administration considers ways to help unlock the U.S.’s credit markets. The U.S. accounts for more than half of the software developers’ revenue.
ICICI Bank Ltd., the No. 2 lender, rose 7.1 percent on speculation the central bank will cut rates to revive slowing economic growth.
“The central bank’s prognosis for growth is very weak; that might force its hand to cut rates,” said Ajay Bodke, who helps manage about $1 billion in equities at IDFC Asset Management Co. in Mumbai.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, advanced 253.39, or 2.8 percent, to 9,257.47. The S&P CNX Nifty Index on the National Stock Exchange rose 2.8 percent to 2,849.50. The BSE 200 Index gained 2.8 percent to 1,091.49. S&P CNX Nifty Index Futures for January delivery added 3 percent to 2,850.
Tata Consultancy, India’s largest software developer, rose 2.3 percent to 507.45 rupees. Infosys Technologies Ltd. climbed 2.8 percent to 1,286.70 rupees. Wipro Ltd., ranked No. 3, added 3.6 percent to 234.10 rupees.
The U.S. Federal Deposit Insurance Corp. is seeking to manage the bad bank that the government is considering setting up to help unlock credit markets, according to two people familiar with the matter. The institution would buy the toxic assets clogging banks’ balance sheets.
ICICI added 7.1 percent, the most since Dec. 18, to 408.05 rupees. HDFC Bank Ltd., the third-biggest lender, climbed 2.5 percent to 911.75 rupees. Housing Development Finance Corp. gained 4.1 percent, the most since Jan. 5, to 1,504.55 rupees.
Slowing Growth
India’s economy may expand 7 percent in the year to March 31, compared with a previous estimate of between 7.5 percent and 8 percent, the Reserve Bank of India said yesterday. The growth forecast has a “downward bias,” said the bank, which held interest rates steady.
The Reserve Bank will cut the repurchase and reverse repurchase rates by 50 basis points by April, and will reduce the cash reserve ratio requirement to 3 percent by October if liquidity tightens again, Mridul Saggar, an economist at Kotak Securities Ltd., said in a note to clients.
Tata Motors Ltd., the maker of Jaguar cars and Land Rover sport-utility vehicles, rose 4.5 percent to 146.65 rupees, its biggest gain since Jan. 1, after the U.K. government said it will offer carmakers 2.3 billion pounds ($3.2 billion) of loan guarantees to help them cope with the recession and adapt to new environmental rules.
Overseas funds sold a net 3.44 billion rupees of Indian stocks Jan. 23, according to the nation’s stock market regulator. They sold for a seventh straight day, the longest streak of net sales since the nine days ended Nov. 24.
The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
Glenmark Pharmaceuticals Ltd. (GNP IN) dropped 46.70 rupees, or 25 percent, to 141.35, the most on record. The Indian drugmaker said profit in the quarter ended Dec. 31 fell 71 percent to 814.3 million rupees. The company also cut its profit and sales forecasts. The stock had its rating cut by JPMorgan Chase & Co. and Citigroup Inc. after the earnings.
Gujarat Alkalies & Chemicals Ltd. (GALK IN) fell 1.65 rupees, or 2.4 percent, to 65.90. The Indian maker of caustic soda said third-quarter profit fell 55 percent to 324.5 million rupees.
Oil & Natural Gas Corp. (ONGC IN) climbed 20.10 rupees, or 3.2 percent, to 641.25. India’s biggest explorer said the subsidy it pays to state-owned refiners in the third quarter may have declined 19 percent from a year earlier after the drop in crude prices.
The oil producer reported profit fell 43 percent for the three months ended Dec. 31.
Satyam Computer Services Ltd. (SCS IN) added 8.35 rupees, or 18 percent, to 55.60. The software exporter at the center of India’s biggest fraud inquiry named Goldman Sachs Group Inc. and Avendus Capital Ltd. to help it identify strategic investors and a possible buyer. Satyam also appointed Boston Consulting Group Inc. as an adviser to support the state-appointed directors and management team, it said in a statement sent to the stock exchanges yesterday.
Sesa Goa Ltd. (SESA IN) rose 7.9 rupees, or 11 percent, to 80.65. Sociedade De Fomento Industrial Pvt. and M/s. Prime Mineral Export Pvt. Ltd. have acquired more than a 5 percent stake in India’s biggest non-state iron-ore exporter, Sesa Goa said in a filing to the stock exchanges.
United Spirits Ltd. (UNSP IN) jumped 76.9 rupees, or 16 percent, to 572.90, the most since Oct. 31. Diageo Plc, the world’s largest liquor maker, is in talks to buy a stake in United Spirits. The talks with Diageo haven’t concluded yet, Bangalore-based United Spirits said in a statement to the National Stock Exchange today.
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