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Bombay shares soar

on foreign fund buying

BOMBAY: The 30-share index of the Bombay Stock Exchange (BSE) surged past 3,700 in Wednesday afternoon trade, rallying over 100 points on heavy foreign funds demand and local speculative buying, brokers said.

The BSE index vaulted 111.16 points, or 3.09 percent, to 3,701.70.

"There's a mad scramble," a trader said. "We're seeing a one-way market and that's not very encouraging."

He said the sharp rally could trigger profit-taking and lure sellers to the market.

India go to the polls beginning April 27 and most people see a coalition government ahead.

In latest deals, the BSE index was up 102.23 points, or 2.85 percent, to 3,692.77.

Banking stock SBI was up 5.0 rupees to 285 with 2.6 million shares traded, steel giant TISCO gained 8.50 at 223.50 in trading volume of 2.5 million shares and Reliance firmed up seven to 230 with over 4.7 million shares traded.

COTTON

Punjab cotton gained fresh ground while Gujarat varieties held steady in a narrow trading range on the cotton market on Wednesday, dealers said.

Cotton arrivals in Punjab fell to 7/8 thousand bales (170 kg each) against the daily average of about 15/20 thousand bales reported last week. In spot deals Punjab F-414 rose 20/30 rupees to 1,800/1,830 rupees per maund (37.32 kg) while Bengal-deshi looked up by 20 rupees at 860/910 rupees per maund.

Gujarat Kalyan (medium-staple) held steady at 10,100/10,500 rupees per candy (355.56 kg) amid limited activity.

SUGAR

Bombay sugar prices climbed modestly on Wednesday with fresh consumer demand and thin supplies helping prices, dealers said.

"Hot temperatures in the atmosphere has triggered more demand for sugar," they said.

Supplies were low on limited offerings by mill owners.

Among ready delivery, prices rose by 5/10 rupees to 1,295/1,315 rupees per quintal for the S-30 variety and to 1,300/1,348 rupees for the M-30 variety. Sugar mill delivery was steady at 1,230/1,240 rupees per quintal amid limited activity.

INTEREST RATES

MAY FALL

Indian interest rates could fall if there is a substantial flow of foreign funds into India after the general elections, chairman of an Indian financial institution said on Wednesday.

"A substantial flow of foreign funds would lead to increased liquidity," said Narayan Vaghul, chairman of SCICI Ltd. "It could be a signal for interest rates to come down."

"My analysis is that there would be some easing of liquidity (after elections) but this (by itself) may not significantly impact on interest rates," he told reporters.

"Taken together with international capital flows, it could impact interest rates," he said.

Polls will be held in India between April 27 and May 30

Vaghul was addressing a news conference after releasing the financial results of SCICI Ltd for the year ended March 31.

He said 1995/96 (April/March) was characterised by high interest rates. "In my 40 years (of career) I haven't seen such interest rates (sustained) over a prolonged period."

Indian banks are lending at over 20 percent per annum.-Reuter