India's Sensitive Index Climbs to Record; Tata Steel Advances

India's Sensitive Index climbed to a second straight record. Tata Steel Ltd., the world's fifth- biggest steelmaker, rose after announcing a $1.5 billion investment in an iron-ore mine overseas.

Profit margins at Corus will improve significantly once the ore is shipped, Vishal Chandak, an analyst at Emkay Share & Stock Brokers Ltd., said in Mumbai. This is good news.

Infosys Technologies Ltd. led software exporters lower on concern the U.S. Federal Reserve's quarter-point rate cut won't be enough to avert a recession in their largest export market.

The Bombay Stock Exchange's Sensitive Index rose 84.98, or 0.4 percent, to 20,375.87, surpassing yesterday's 20,290.89 record. The S&P/CNX Nifty Index on the National Stock Exchange gained 62.05, or 1 percent, to 6,159.30. Nifty futures for December delivery added 1.2 percent to 6,178.

Tata Steel rose 28.6 rupees, or 3.4 percent, to 864.45. The mine will supply Tata's European mills in the next two to three years, Managing Director B. Muthuraman said. Supplies from the project will help lower costs at Tata's mills in Europe that were acquired as part of its 6.83 billion pound ($14 billion) takeover of Corus Group Plc in April.

U.S. stocks tumbled the most in a month yesterday, sending the Standard & Poor's 500 Index 2.5 percent lower.

Recent developments, including deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation, the Federal Open Market Committee said in a statement after yesterday's meeting, when the benchmark interest rate was cut to 4.25 percent.

U.S. Growth Concerns

Infosys, India's second-biggest software exporter, dropped 58.25 rupees, or 3.3 percent, to 1,684.80. Satyam Computer Services Ltd., the fourth largest, declined 10.55 rupees, or 2.4 percent, to 431.15.

Investors were speculating on a 50 basis-point rate cut which did not happen, said Sanjay Dongre, who oversees about $1 billion in stocks at UTI Asset Management Co. in Mumbai. The Fed also pointed to slowing growth in the U.S. economy.

Indian software companies get more than half their sales from the U.S.

Overseas funds bought a net 3.01 billion rupees ($76 million) of Indian shares on Dec. 10, boosting their total equity purchases this year to $16.8 billion, according to the Securities & Exchange Board of India's Web site.

The following stocks rose. Stock symbols are in parenthesis after company names.

Edelweiss Capital Ltd. (EDEL IN) surged 684.95 rupees, or 83 percent, to 1,509.95 on its first day of trading. The Indian financial services company raised 6.9 billion rupees selling shares at 825 rupees each in an initial share sale.

Reliance Capital Ltd. (RCFT IN) added 89.75 rupees, or 3.7 percent, to 2,511.50. The Indian financial services provider controlled by billionaire Anil Ambani said its unit Reliance Capital Asset Management Ltd. will sell a 5 percent stake to Eton Park Group. Eton Park, a global investor, will pay 5.01 billion rupees for the stake, Reliance Capital said in a stock-exchange filing, valuing the company at 100 billion rupees.

Television Eighteen India Ltd. (TLEI IN) added 3 rupees, or 0.6 percent, to 488.10. The media firm, which runs the CNBC-TV18 channel, said it agreed to buy a majority stake in Infomedia India Ltd., a publisher of business and telephone directories. Infomedia slid 13.85 rupees, or 5.4 percent, to 244.25.

UTV Software Communications Ltd. (UTV IN) climbed 65.7 rupees, or 6.9 percent, to 1,025.10. Future Group is offering more than Walt Disney India to buy a 51 percent stake in UTV Software, DNA Money reported, without saying where it got the information. Future Group denied the report.

Source - Bloomberg