MW: Indian stocks gain on oil drop, coalition talks
By Nick Godt, MarketWatch
MUMBAI (MarketWatch) — Indian stocks rose on Tuesday, as crude-oil prices fell back from 29-month highs and concerns about the unity of India’s coalition government eased.
After discord over the weekend, talks resumed between the ruling Congress party and the Dravida Munnetra Kazhagam party (DMK), which had threatened to leave the coalition, according to reports.
The Sensex (XX:SENSEX 18,440, +216.98, +1.19%) gained 216.98 points, or 1.2%, to end at 18,439.65.
Gains on the Sensex were led by a 3.2% advance in shares of telecom firm Barti Airtel Ltd. (IN:532454 334.20, +10.25, +3.16%) and a 2.5% gain in shares of information-technology giant Infosys Technologies (IN:500209 3,115, +76.95, +2.53%) .
On the Bombay Stock Exchange, information technology, banks and the metals-mining sector led the advance.
Oil retreated after a report in the Financial Times said that Kuwait, the United Arab Emirates and Nigeria may join Saudi Arabia in increasing output to make up for a drop in Libyan oil, as fighting continued in that country. Read more on oil.
On Monday, the Sensex fell 1.4% as rising oil fueled inflation concerns and put pressure on sectors sensitive to changes in interest rates.
Adding to market concerns, India’s coalition government, already weakened by allegations of corruption in the selling of telecom licenses, came under further pressure as one of its key parties targeted by the investigations said it would withdraw from the coalition.
By Tuesday, talks between the ruling Congress party and the DMK party had resumed, and six DMK ministers who were expected to resign held back from doing so.
In corporate news, Tata Steel Ltd. (IN:500470 614.55, +11.70, +1.94%) is boosting its partnership with Canada’s Millenium Capital Corp. to develop iron-ore reserves in Canada, The Wall Street Journal reported.
With demand booming and commodity prices surging, global steel players are competing to secure iron-ore, a key ingredient for steel. Over the past two months, both Arcelor Mittal (MT 35.35, -0.42, -1.17%) , the world’s largest steel producer, and China’s Wuhan Iron & Steel Ltd. (CN:600005 4.75, -0.02, -0.42%) , have also boosted their stakes in Canadian iron-ore projects.
