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Thursday, December 31, 2009

Indian Stocks Set for Biggest Annual Gain in 18 Years

December 31, 2009

Dec. 31 -- India’s stocks are set for their biggest annual gain in 18 years, led by NTPC Ltd. after the Economic Times reported the government may relax a rule to allow power producers to sell at market prices.

NTPC, the nation’s biggest power utility, surged to a two- year high. Economic Times reported that NTPC and other energy suppliers may get approval to sell about 10 percent of their power at market-determined prices, boosting profits. Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, climbed to a four-week high after metal prices rallied.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 135.63, or 0.8 percent, to 17,479.45 at 10:08 a.m. in Mumbai. The gauge has risen 80 percent this year, sparked by a rally after the election victory of Prime Minister Manmohan Singh’s ruling coalition in May, on expectations he will introduce measures to boost economic growth.

“The government is serious about reforms,” said Kishor Ostwal, managing director of CNI Research (India) Ltd. in Mumbai. “The spectacular gains this year has been due to the market- friendly policies of the Manmohan Singh government.”

The Sensex has more than tripled in the past decade, compared with a 5 percent drop in the MSCI Asia Pacific Index. The S&P CNX Nifty Index on the National Stock Exchange rose 0.7 percent to 5,207.20. The BSE 200 Index increased 0.8 percent to 2,185.60. The markets are closed tomorrow for a public holiday.

The National Stock Exchange and rival Bombay Stock Exchange, Asia’s oldest, plan to start trading 55 minutes earlier at 9 a.m. from Jan. 4.

NTPC added 2.9 percent to 239.75 rupees, the highest since Jan. 17, 2008. Eighty-five percent of the output from power producers such as NTPC is currently sold to state government utilities on long-term contracts.

The government may allow NTPC to sell a part of the remaining power to bulk buyers such as sugar mills and steel factories, the report said. Power Secretary H. S. Brahma declined to comment on the report when contacted on his mobile phone.

Reliance Infrastructure Ltd., the nation’s third-largest utility, climbed 0.8 percent to 1,160 rupees, its sixth day of gains.

Sterlite advanced 0.6 percent to 86.5 rupees. Copper for delivery in three months on the London Metal Exchange gained as much as 1.2 percent to $7,415 a metric ton, the highest price since Sept. 4, 2008.

Hindalco Industries Ltd., the biggest aluminum producer, rose 0.8 percent to 161.1 rupees. Aluminum rose 0.8 percent to $2,260 a ton on the London exchange.

Overseas funds bought a net 3.85 billion rupees ($82.4 million) of Indian equities on Dec. 29, taking their investments in stocks this year to 830.7 billion rupees, the nation’s market regulator said yesterday.

Purchases by global investors have reached $17.4 billion this year, poised to surpass the record $17.65 billion of net inflow into stocks in 2007.


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