Indian Stocks Advance Overseas on Government Winning Trust Vote
By Pooja Thakur
July 22 (Bloomberg) -- 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 13 percent to $33.89 in U.S. trading, after Indian markets closed. HDFC Bank Ltd., the third largest, climbed 9.8 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 percent, from 26 percent, since 2006.
This year, foreign investors, who bought a record $17.2 billion of stock 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.
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