Banks up on Goldman upgrade

STOCK REPORT

Stocks rose to their highest in more than two weeks, led by banks after Goldman Sachs Group raised its rating on the shares to "attractive.'' State Bank of India, the nation's biggest lender, led the gains.

The Sensex closed up by 116.45 points or 0.8 per cent, at 14,411.95. This was the highest closing since June 5, according to data compiled by Bloomberg. The Nifty added 34.35 or 0.8 per cent, to 4,248.65. Of the 30 stocks included in the benchmark index, 23 gained and five declined.

State Bank of India gained Rs 52.8 or 3.9 per cent, to 1,425.2. Housing Development Finance rose Rs 34.45 or 1.9 per cent, to 1,810.35.

Goldman Sachs analysts, including Sampath Kumar, raised their recommendations for India's financial services providers, saying the stabilizing inflation will prevent the central bank from raising borrowing costs.

State Bank was lifted to "neutral'' from "sell'' and Goldman increased it's price estimate for the stock by 52 per cent to Rs 1,390. Estimates for HDFC Bank and Housing Development rose by 33 per cent to Rs 1,218 and 30 per cent to 2,153 respectively.

ICICI Bank, the nation's most valuable lender, climbed by Rs 3.45 or 0.4 per cent, to Rs 947.85, after the Economic Times newspaper reported that the Singapore government's investment arms plan to buy about 40 per cent of the lender's record share sale.

Overseas investors sold shares worth Rs 289 million ($7.1 million) yesterday, according to the latest information on the Securities & Exchange Board of India's web site.

HCL Technologies rose by Rs 1 or 0.4 per cent, to 337.2. The local software maker, controlled by billionaire Shiv Nadar, may announce that it received a $100 million order from an aerospace services company, the Economic Times reported citing unidentified people.

Indian Hotels declined by Rs 1.25 or 0.9 per cent, to Rs 144.9, after advancing to a high of Rs 149.75.

The country's biggest provider of rooms and owner of the Taj chain of properties said the fourth-quarter profits rose 70 per cent to Rs 1.34 billion. The revenues gained 45 per cent to Rs 5.39 billion.