Sensex in India Rallies 1.1%; Gold, Silver Highs

Devan Biswas
21 Feb, 2011
New York City

Stocks in Mumbai surged on the expectations of growth oriented budget and higher incentives for export oriented industries. The Sensex index added 1.2% and gold rallied for the seventh day in a row. Steel Authority plans to invest $12 billion to build four overseas steel plants.

[R]4:30 PM Mumbai – Stocks in Mumbai surged on the expectations of growth oriented budget and higher incentives for export oriented industries. The Sensex index added 1.2% and gold rallied for the seventh day in a row. Steel Authority plans to invest $12 billion to build four overseas steel plants.[/R]

Stocks in Mumbai closed higher ahead of fiscal and railway budget and on the expectations of the rising exports in the current quarter.

In international trading, energy prices rose in Asia as tensions in the Middle East spread to oil producing nations. Protesters in Libya demonstrated for the second week and first protests erupted in Morocco.

G-20 group of nations agreed to a broad of set of indicators to monitor and prevent the next financial crisis.

The indicators that track rising global imbalances and monitor investment flows will be used as an early warning system. The indicators include external debt, budget deficits and private savings rate but will not have current account surplus and foreign exchange reserves as China resisted their inclusions.

The Sensex index closed up 226.79 or 1.2% to 18,438.31 and the Nifty index increased 59.65 to 5,518.60.

The rupee closed at 45.82 to a dollar and gold added 154 to Rs 20,702 per ten grams. Gold prices increased for the seventh day in a row and silver prices increased 2.6% to 49,840 per kilo.

Steel Authority of India plans to build four steel plants with a total capacity of 3 million tons. The plants are expected to be built in South Africa, Oman, Mongolia and Indonesia and will be funded with the help of debt.

C.S. Verma, the company chairman said that of the $12 billion of costs up to 80% will be met through debt and the rest from the internal resources.

Stock Movers

Telecom stocks declined. Bharti Airtel fell 0.1% to Rs 331.95 and Reliance Communications added 0.6% to Rs 93.70.

Software exporters increased. Wipro added 4.4% and TCS increased 4.1%.

Resources linked stocks closed higher. Sterlite Industries gained 3.4%.