Indian shares hit six-month high

By Staff Reporter
AFP South Asian Edition

Feb 15, 2012 02:23 EST

Indian shares rose to their highest level in six months during morning trade Wednesday, buoyed by foreign fund inflows, a rising rupee and easing inflationary pressures.

The benchmark Sensex index of 30 blue-chip stocks rose as much as 1.35 percent to 18,089.99, led by auto and engineering stocks.

The Sensex last crossed 18,000 points in August.

"The rupee appreciation, easing of inflation and hopes of a solution to the Greece problems have all boosted sentiment," said Hemen Kapadia, chief executive at Mumbai investment advisory firm Chart Pundit.

India's rupee has risen 9.0 percent against the dollar in the past two months, boosted by foreign funds inflows -- after being the worst performing currency in Asia last year.

The rupee was at 49.1 to the dollar on Wednesday, strengthening from a record low of 54 in December last year.

A rising rupee makes key imports such as oil cheaper.

Foreign funds bought $4.17 billion worth of Indian stocks so far in 2012 while selling $1.56 billion worth of Indian issues during the same time a year earlier, according to data from the market regulator.

Sentiment has also improved as India's annual inflation starts to fall. It reached a two-year-low of 6.55 percent in January, fanning hopes of an early interest rate cut to counter weakening economic growth.

India's top vehicle maker, Tata Motors, jumped 6.66 percent intraday Wednesday to 285.75 rupees, after it reported Tuesday a 41.0 percent rise in its quarterly net profit, led by strong demand for cars.

Engineering giant Larsen & Toubro was up 3.31 percent to 1,425 rupees.

Source: AFP South Asian Edition

 

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