Times of Oman
Nov 28, 2015 LAST UPDATED AT 01:14 AM GMT
Indian stocks advance
December 26, 2012 | 12:00 AM

Mumbai: Indian stocks rallied the most in a month, led by lenders and industrial companies, as overseas investors added to their holdings of domestic shares for a 28th straight day. The BSE India Sensitive Index, or Sensex, rose 0.8 per cent to 19,417.46, the most since November 30, at the close. Volumes on the gauge were 32 percent lower than the 30-day average. ICICI Bank, the second-biggest lender, rose the most in a month.

Bharti Airtel, the largest cell-phone operator, jumped to a two-week high. Larsen & Toubro, the biggest engineering firm, gained for the first time in five days. The Sensex has risen 26 per cent this year, headed for its biggest annual jump since 2009, as government steps to open the economy to foreign investment lured offshore funds. Overseas funds were net buyers of domestic stocks for a 28th day on December 24, the longest stretch of net purchases since a record 41-day streak through October 27, 2010, data shows.

"Flows from overseas would be pretty good" in the new year, Sanjay Dutt, a director at Quantum Securities in New Delhi, told Bloomberg India TV yesterday. "The United States elections are out of the way, Europe is sorting itself slowly and a clear signal from India's central bank is that it is going to focus on growth than on inflation. That means you will see a 50-basis point cut in rates at least by March, if not January."

Reserve Bank of India governor Duvvuri Subbarao signaled higher odds of a reduction in interest costs, lifting investor confidence even after he held the benchmark rate on December 18 for a fifth policy meeting. Goldman Sachs has said it sees 'high likelihood' of a 50 basis points cut in January.

While the RBI kept the repurchase rate at 8 per cent and held the banks' reserve ratio at 4.25 per cent, ebbing in the inflation rate will allow monetary policy to "respond to the threats to growth," the authority said. RBI's next policy review is on January 29.

ICICI Bank rallied 2.4 per cent to Rs1,148.65. State Bank of India increased 1.7 per cent to Rs2,370.85. Drugmaker Sun Pharmaceutical Industries added 1.7 per cent to Rs753.7, while Bharti Airtel advanced 2.9 per cent to Rs317.4. Larsen jumped 2.3 per cent to Rs1,622.35. Bharat Heavy Electricals, the biggest power-equipment maker, increased 1.1 per cent to Rs230.2.

The S&P CNX Nifty Index on the National Stock Exchange of India rose 0.9 per cent to 5,905.60. The BSE Mid-Cap Index added 0.7 per cent, the most since December 10. India VIX, which gauges the cost of protection against losses in the Nifty, tumbled 2.7 per cent to 14.10, data shows.

The markets were closed on Monday for Christmas. Credit Analysis & Research surged 23 per cent in its trading debut.

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