Indian Stocks Advance a Second Day After Mumbai Terror Attacks

By Pooja Thakur

Dec. 1 (Bloomberg) -- India’s stocks advanced for a second day, after terror attacks in the financial capital of Mumbai, on speculation events over the past weak won’t affect investment.

Reliance Industries Ltd., the nation’s most valuable company, gained 2.1 percent to its highest in almost three weeks. ICICI Bank Ltd., the nation’s second largest lender, gained 2.4 percent to its highest since Nov. 18.

“Markets were appearing technically oversold and with the world markets rallying last week, we are playing catch up,” said Jayesh Shroff, who helps manage the equivalent of $2.4 billion in equities at SBI Asset Management Co. in Mumbai. “I don’t see the terror attacks having any major impact on investment.”

The benchmark Bombay Stock Exchange Sensitive Index, or Sensex, rose 208.51, or 2.3 percent, to 9,301.23 as of 10:56 a.m. local time. The S&P CNX Nifty Index on the National Stock Exchange gained 69.35, or 2.5 percent, to 2,824.45. The BSE 200 Index added 2.3 percent to 1,086.89. Nifty for December delivery rose 2.8 percent to 2,839.

Asian stocks last week had their second-best week this year after China slashed interest rates, spurring speculation government measures will pull the global economy out of recession and boost demand. The MSCI Asia Pacific Index rallied 6.8 percent last week, the second-best gain this year, surpassed only by a 6.9 percent rally at the end of October. In comparison, India’s benchmark index rallied just 2 percent last week.

Reliance climbed 2.2 percent to 1,159 rupees, the highest since Nov. 12. ICICI rose 2.4 percent to 360.05 rupees, the highest since Nov. 18.

Terror Attacks

At least 195 people were killed in India’s deadliest terrorist attack in 15 years. The attackers moved last week through India’s financial hub, targeting a Jewish center, the Oberoi-Trident hotel complex, the Taj Mahal Palace and Tower hotel, a railroad station and a restaurant.

Prime Minister Manmohan Singh yesterday replaced Home Minister Shivraj Patil after the terror attacks. Singh, 76, appointed Finance Minister Palaniappan Chidambaram to oversee the Home Ministry and assumed the top economic post himself.

“At the end of the day is the economy going to be worse because of the terror attacks? The answer there is most likely no,” said Markus Rosgen, chief Asia strategist at Citigroup Inc. “The underlying fundamentals of the economy are impacted more by what’s happening globally than by these events.”

Overseas funds sold a net 4.36 billion rupees ($87 million) of Indian stocks on Nov. 26, increasing outflows from stocks this year to $13.6 billion, the nation’s market regulator said.

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net