10:00AM New York, 7:30 PM Mumbai – Stocks in Mumbai trading rebounded on the hopes that the economy will recover in the third quarter of this year. Stocks closed higher on low trading volume. Rupee edged higher but hover near the record low and foreign exchange reserve edged lower at the end of February.

Indian stocks rose 1.6% as investors bought large cap stocks with low valuations and on expectations the country’s economy will recover after September. Chief economic advisor to the government, Viramani suggested that the economy will recover in the third calendar quarter as global economic stimulus takes hold.

In Mumbai, the Sensex index rose 1.6% or 127.90 to 8,325.82 and the CNX Nifty gained 1.7% or 43.45 to 2,620.15.

Of the stocks traded on the BSE, 1,005 advanced, 1,445 plunged, and 66 were unchanged.

Trading Statistics

Daily turnover on the BSE declined to 3,329 crore rupees from 3,423.79 crore rupees yesterday.

Foreign Exchange Reserves Drop in February

Reserve Bank of India reported today that the country’s foreign exchange reserves dropped to $249.3 billion at the end of February from $249.5 billion a week earlier.

Rupee Rises

The rupee rose 0.3% to 51.63 against the dollar from 51.76 yesterday.

Gainers & Losers

Reliance Industries gained 1.9% to 1,170.55 rupees.

Wipro rose 3.4%, Infosys Technologies edged up 3.1% and HCL Technologies increased 1.2%.

Satyam Computer Services advanced 20% after company received approval from Securities and Exchange Board of India to sell 51% stake. The company will soon invite bidders with more than $150 million in net assets.

Geodesic increased 15.3% to 52.25 rupees after the company said it will buyback up to 25% stake at 75 rupees per share.

Zensar Technologies gained 4.8% after announcing that it secured a multi-million dollar deal from a U.K. based company.

Hindustan Unilever dropped 2.7%, after JPMorgan Chase & Company cut its rating on the stock to ''underweight'' from ''neutral'', on rising competition.

Maruti Suzuki India fell 2.8% on news it might cut the price of its best selling model Alto, Tata Motors dropped 0.6% as Moody''s Investors Service slashed the corporate family rating of Tata Motors to B3 from B1.

Mahindra & Mahindra rose 1.8% after the company bought back foreign-currency convertible bonds worth $6.5 million at a discount.

Financial stocks were mixed. ICICI Bank fell 0.1% to 269.30 rupees after it cut rates on new home loans from 0.25% to 0.5%. HDFC Bank gained 0.1% to 801.10 rupees and State Bank of India rose 0.7%.

Wall Street Finance increased 17.8% on news Reliance Capital is set to take a controlling stake in the company.

Ranbaxy Laboratories declined 2.2%.

Wockhardt rose 1.9% on reports foreign drug firms are seeking a significant stake in its biotechnology business.

Alphageo India surged 4.6% after receiving an order worth 39.01 crore rupees.