Indian Stocks Rise to Highest in Month on Slowing Inflation
By Pooja Thakur
Dec. 18 (Bloomberg) -- India’s benchmark stock index rose to its highest in a month, led by ICICI Bank Ltd. and State Bank of India, after inflation eased to its slowest since March, sparking speculation interest rates may be cut to boost lending.
ICICI, the nation’s second-largest bank, surged 9.3 percent to its highest in more than two months. State Bank, the biggest lender, jumped 7.8 percent to its highest in a month. DLF Ltd., India’s biggest developer, gained 9.4 percent.
“Lower inflation could see interest rates declining,” said Jayesh Shroff, who helps manage about $4.7 billion at SBI Asset Management Co. in Mumbai.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 361.14, or 3.7 percent, to 10,076.43, the highest since Nov. 10. The S&P CNX Nifty Index on the National Stock Exchange added 3.6 percent to 3,060.75. The BSE 200 Index climbed 3.7 percent to 1,188.20. Nifty futures for December delivery rose 4.2 percent to 3,073.
The Sensex has declined 50 percent this year on concern the Indian economy may slow and as risk-averse investors withdraw money from emerging markets.
ICICI added 9.3 percent to 472 rupees, the highest since Oct. 7. State Bank gained 7.8 percent to 1,295.95 rupees. HDFC Bank Ltd., the No. 3 lender, added 5.6 percent to 1,058.65 rupees, the highest since Nov. 10. DLF added 9.4 percent to 277.40 rupees.
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