India's main stock index rose 4.7 percent on Wednesday, posting its biggest percentage gain in three weeks, as worries over US credit-related losses eased boosting world markets.
Petrochemicals maker Reliance Industries, the top weighted stock in the main index, led the gains rallying more than 7 percent, while improved sentiment for financials helped ICICI Bank and HDFC Bank surge nearly 9 percent and 11 percent, respectively. The benchmark 30-share index ended up 4.69 percent, or 893.58 points, at 19,929.06, after rising as high as 19,987.71.
It was the biggest percentage rise since a 4.99 percent jump on October 23, and the index is only 1.5 percent away from a record high of 20,238.16 hit on October 30. The BSE index had fallen for six sessions in a row to Monday in its longest stretch of losses in almost five years as foreign funds trimmed their exposure as US credit troubles rattled global equity markets, but rebounded 1.6 percent on Tuesday.
"Liquidity has been poor in last week or so. So I would not give it the same level of aggression," said Abhay Aima, head of private banking at HDFC Bank. A surge in inflows after the US rate cut in September had powered the BSE index to a series of record highs. Foreign investors have sold about $600 million in November, trimming their exposure to Indian equities to $16.7 billion in 2007.
Reliance Industries added 7.1 percent, or 191.65 rupees, to 2,887.50 rupees. ICICI Bank gained 8.7 percent to 1,277.90 rupees, while HDFC Bank was up 10.8 percent at 1,749.10 rupees. All components in the BSE index closed higher, with six rising more than 6 percent. In the broader market, 1,990 gainers outpaced 749 losers on volume of 562.8 million shares.
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