Sept. 19 (Bloomberg) -- India's Sensitive Index crossed 16,000 for the first time after the U.S. Federal Reserve cut its benchmark interest rate more than expected, easing concern a housing slump will drive the world's largest economy into recession. Reliance Industries Ltd. led advances.
``Now that the U.S. concern has eased, investors will focus on India's domestic story of strong earnings growth and robust consumption,'' said Sanjay Dongre, who oversees about $1 billion in stocks at UTI Asset Management Co. in Mumbai.
The Bombay Stock Exchange's Sensex, rose 426.81, or 2.7 percent, to a record 16,095.93 as of 10:50 a.m. local time. The index surpassed the record close of 15,794.92 set on July 24. All 30 stocks in the index advanced. The S&P/CNX Nifty Index on the National Stock Exchange climbed 109.25, or 2.4 percent, to 4,655.45. Nifty futures for September delivery gained 2.4 percent, to 4,661.
Reliance, which run's the world's third biggest refinery, gained 58.1 rupees, or 2.8 percent, to 2,116.5. Housing Development Finance Corp., India's largest mortgage lender, rose 93 rupees, or 4.3 percent, to 2,274. ICICI Bank Ltd., the country's second-largest lender, climbed 29.4 rupees, or 3.2 percent, to 954.45. The three stocks account for about a quarter of the Sensex's weight.
Earnings of companies in the Sensex, excluding oil companies, will grow 16 percent in the year ending March 31, 2008 Ratnesh Kumar, head of research at Citigroup's Indian unit said in July.
U.S. Rally
The Federal Reserve lowered its key interest rate by half a point to 4.75 percent, the first cut in four years. Most economists anticipated a quarter-point reduction, according to a Bloomberg survey. The Fed's Board of Governors also lowered the rate on direct loans to banks by half a percentage point to 5.25 percent.
U.S. stocks rallied the most in four years after the Fed's decision. The Standard & Poor's 500 Index climbed 2.9 percent yesterday, the biggest gain since March 2003, while the Dow Jones Industrial Average advanced 2.5 percent. The Nasdaq Composite Index increased 2.7 percent.
Tata Consultancy Services Ltd. led software exporters higher on expectation the cut in U.S. interest rates will help bolster growth in their largest export market.
Software Exporters Advance
Tata Consultancy, the country's largest software exporter, rose 21.9 rupees, or 2.2 percent, to 1,024. Infosys Technologies Ltd., the second biggest, gained 50.3 rupees, or 2.8 percent, to 1,850.25. Wipro Ltd., the No. 3, advanced 9.25 rupees, or 2.1 percent, to 453.25. Satyam Computer Services Ltd., the fourth largest, added 11.35 rupees, or 2.7 percent, to 433.1.
Indian software companies get more than half their sales from the U.S.
Separately, Infosys may compete with Microsoft Corp. in a 4.6 billion euro ($6.4 billion) bid for Sage Group Plc, the Economic Times reported on its Web site, without saying where it got the information. Intuit Inc. and Goldman Sachs Group Inc. are also likely bidders for Sage, the report said. Sage is Britain's biggest maker of accounting software.
Overseas investors sold a net 2.67 billion rupees ($65.5 million) of Indian stocks on Sept. 17, according to the latest figures provided by the Securities & Exchange Board of India's Web site.
The following shares rose. Stock symbols are in brackets after company names.
Indian Hotels Co. (IH IN) added 0.9 rupee, or 0.7 percent, to 130.35. Orient-Express Hotels Ltd., the owner of New York's 21 Club restaurant, yesterday told India's largest provider of rooms that it isn't interested in holding talks for a global partnership. Indian Hotels on Sept. 17 said it bought 10 percent of the Bermuda-based company for $211.3 million and said it had begun negotiations for a network alliance to build a global brand.
Jubilant Organosys Ltd. (JOL IN) climbed 12.4 rupees, or 4.3 percent, to 303.7. The maker of chemicals and drugs yesterday announced a new five-year ``multi-million dollar'' contract for the supply of pyridines, or industrial solvents, to Syngenta AG.
Maruti Suzuki India Ltd. (MSIL IN) rose 49.65 rupees, or 5.7 percent, to 925.05. India's largest carmaker will set up an auto parts venture with Japan's Futuba Industrial Co. Ltd., The Telegraph newspaper said, without saying where it got the information.
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