Wednesday, July 15, 2009

Stocks Rise as Monsoon Concern Eases

Indian stocks rose the most in seven weeks on expectations prospects for crops will improve after the weather bureau forecast monsoon rains would intensify.

Mahindra & Mahindra Ltd., the country's largest maker of tractors, gained 4 percent, while Jaiprakash Associates Ltd., the biggest maker of dams, soared almost 8 percent. Agriculture makes up about 20 percent of the Indian economy, according to IIFL Ltd. in Mumbai.

"If the monsoon rains improve from hereon, it will be a boost for the markets," said R.K. Gupta, who helps oversee the equivalent of $128 million at Taurus Asset Management Ltd. in New Delhi. "Positive news from other stock markets across the world has supported the market today."

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 453.38, or 3.4 percent, to 13,853.7, the most since May 27. The S&P CNX Nifty Index on the National Stock Exchange added 3.5 percent to 4,111.4. The BSE 200 Index increased 3.7 percent to 1,688.19.

The monsoon is the main source of irrigation for the nation's 235 million farmers. The northwest region, the nation's biggest producer of rice, wheat and sugar cane, will receive rain and thundershowers, the India Meteorological Department said today on its Web site. The country is the world's top producer of the three crops and relies on the June-September rains to produce food for its 1.2 billion people.

Mahindra, Jaiprakash

"If the rains pick up sufficiently enough in most regions during the peak sowing season, which is until the end of July, the concern on crop output may not be so high," said Sangeetha Saranathan, an analyst who tracks the agriculture sector at IIFL in Mumbai. "If the rains are good, the concerns on lower GDP growth will go away."

Mahindra & Mahindra rose 4 percent to 705.2 rupees. Jaiprakash soared 7.9 percent to 191.6 rupees.

Tata Steel Ltd., the country's biggest producer of the alloy, gained after Asia's largest steelmakers raised prices and production on improving demand. Baoshan Iron & Steel Co., China's No. 1 steelmaker, increased prices by as much as 14 percent for August delivery, while Posco, South Korea's largest, lifted its 2009 production target.

Tata Steel jumped 5.6 percent to 357.8 rupees. JSW Steel Ltd., the country's third-largest producer of the alloy, soared 9.3 percent to 530.2 rupees, while Steel Authority of India Ltd. gained 7.9 percent to 152.6 rupees.

Asian stocks rose, giving the MSCI Asia Pacific Index its biggest gain in two months, as Singapore upgraded its forecast for economic growth.

Asian Markets

The MSCI Asia Pacific Index rose 2.4 percent to 100.45 in Tokyo after slumping yesterday to its lowest level since May 18. The gauge today climbed the most since May 19 and has risen 42 percent from a five-year low on March 9 on optimism government stimulus policies will revive the global economy.

DLF Ltd., the biggest real estate developer, jumped 11 percent to 299.45 rupees. Reliance Infrastructure Ltd., the second-largest utility, rose 9.3 percent to 1,054.1 rupees. ICICI Bank Ltd., India's No. 2 lender, increased 7.4 percent to 679.5 rupees. Reliance Industries Ltd., the country's most valuable company, advanced 3.6 percent to 1,814.05 rupees.

Aban Soars

Aban Offshore Ltd., India's largest oil rig company, rose the most in 15 years in Mumbai trading after Morgan Stanley lifted the stock's target price, citing improving business and a possible restructuring of its debt.

Aban, the best performer on the broader BSE500 index today, gained after Morgan raised the stock's target price 88 percent to 1,114 rupees a share. The shares jumped 25 percent during trading today, the biggest gain since May 17, 1994. It closed up 21 percent at 787.05 rupees.

Welspun-Gujarat Stahl Ltd. added 6.1 percent to 185.3 rupees after the country's No. 1 insurer invested in the company. Life Insurance Corp. of India bought 1 million shares of the pipe maker in a single transaction, according to information on the Bombay Stock Exchange Web site, paying 173 rupees a share.

Source:: http://www.bloomberg.com

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