“The disinvestment move will help moderate India’s fiscal deficit,” said Jagannadham Thunuguntla, head of equities at SMC Capitals Ltd. in New Delhi. “Also, it may help in higher GDP growth led by increased government spending.”

1. India Stocks Rise for Third Day; MMTC Gains on Share-Sale Plan
By Rajhkumar K Shaaw
Nov. 6 (Bloomberg) -- Indian stocks rose, extending the benchmark index’s longest string of
gains in five weeks, after the government approved a plan to sell more shares in state-
controlled companies, helping it raise funds to boost spending.
MMTC Ltd., India’s biggest state-owned trading company, surged 20 percent, the most in 10
months. Rico Auto Industries Ltd., an auto component maker that supplies General Motors
Co. and Ford Motor Co., climbed 5.1 percent after workers ended a 45-day strike.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 94.38, or 0.6 percent, to
16,158.28. The measure this week gained 1.7 percent, snapping two weeks of losses. The
S&P CNX Nifty Index on the National Stock Exchange rose 0.6 percent to 4,796.15. The BSE
200 Index added 1.1 percent to 2,011.08.
“The disinvestment move will help moderate India’s fiscal deficit,” said Jagannadham
Thunuguntla, head of equities at SMC Capitals Ltd. in New Delhi. “Also, it may help in
higher GDP growth led by increased government spending.”
MMTC soared 20 percent to 36,146.85 rupees, the most since Dec. 17. State Trading Corp.,
the No. 2, leapt 15 percent to 353.6 rupees. NMDC Ltd., India’s largest iron-ore producer,
climbed 10 percent to 338 rupees. Hindustan Copper Ltd., India’s biggest copper miner,
99.59 percent state-owned, gained 10 percent to 256.35 rupees. Rashtriya Chemicals &
Fertilizers Ltd., 92.5 percent government-owned, added 12 percent to 73.5 rupees.
Budget Deficit
The government owns 99.33 percent in MMTC and 91.02 percent in State Trading, while it
holds 98.38 percent in NMDC, according to filings to the Bombay Stock Exchange. The
government will use the money raised from the sale of shares of state companies for social
spending, Home Minister Palaniappan Chidambaram told reporters in New Delhi
yesterday.

2. India’s fiscal deficit reached 6 percent of gross domestic product in the year ended March
31, surpassing the 2.5 percent government target. The key Sensitive stock index has more
than doubled from this year’s lowest level, in March.
Prime Minister Manmohan Singh won a resounding re-election in May, reducing his
dependence on allies such as the communist parties that opposed asset sales and increased
foreign investment during his first term. A coalition without communist parties allows
Singh to sell state assets and accept more overseas funds into insurance and banking.
Rico Auto
Rico Auto gained 5.1 percent to 22.8 rupees. The company will resume deliveries to GM and
Ford after workers agreed to end a strike late yesterday, Surendra Singh Chaudhary, senior
vice president in charge of human resources, said by phone today. About 2,200 workers
stopped work at the company’s factory at Gurgaon near New Delhi, demanding that 16 of
their colleagues who were suspended be reinstated.
Overseas funds bought a net 137 million rupees ($2.9 million) of Indian stocks on Nov. 4,
the Securities and Exchange Board of India said on its Web site. The funds have bought
681.4 billion rupees of the stocks this year to date, compared with record net sales of 530
billion rupees for the whole of 2008.
The following stocks were among the most active today:
Idea Cellular Ltd. (IDEA IN) lost 5.6 percent to 50.5 rupees. The price estimate of the mobile
phone services operator was cut to 43 rupees from 71 rupees at Morgan Stanley. The
brokerage kept the rating unchanged at “underweight”.
IFCI Ltd. (IFCI IN) gained 2.5 percent to 51.2 rupees. India short-listed Boston Consulting
Group Inc., Ernst & Young LLP and McKinsey & Co. to advise the government on selling a
stake in the state-controlled project financier, the Press Trust of India said yesterday,
without citing anyone.
Tata Chemicals Ltd. (TTCH IN), the world’s second-largest soda ash producer, gained 5.2
percent to 278 rupees after India imposed a 20 percent duty on soda ash imported from
China. GHCL Ltd. (GHCL IN) gained 14 percent to 43.1 rupees, Nirma Ltd. (NIRMA IN), the
nation’s No. 2 detergent maker, rose 6.7 percent to 184.6 rupees, and DCW Ltd. (DCW IN)
added 4.7 percent to 21.25 rupees.