Sat, Nov 29, 2008 - Page 5 News List

MUMBAI ATTACKS: Sensex rebounds after multiple attacks


India’s first terrorist attack against foreigners has done nothing to dent Mark Mobius’ confidence in the stock market of the world’s second-fastest growing major economy.

Mobius, executive chairman of San Mateo, California-based Templeton Asset Management Ltd, said any stock declines may be shortlived as India’s economy was still “vibrant” and the Bombay Stock Exchange Sensitive Index was valued near the cheapest level on record relative to profit.

AMP Capital Investors also expected any declines spurred by the attacks on two luxury hotels in India’s financial capital to be short-lived.

The Sensex rose 1.1 percent to 9,127.89 at 2:18pm in Mumbai, after falling 1.5 percent earlier. The rupee fell 1.1 percent to US$50.045, the biggest drop in more than two weeks.

“It’s a fast-growing economy and we can’t allow this kind of incident to sway our decisions regarding where we want to invest,” Mobius, 72, said in a Bloomberg Television interview from Hong Kong. “India will rise from this and prosper.”

Stocks also rose after India’s economy grew at a faster-than-expected pace. Asia’s third-largest economy expanded 7.6 percent in the three months to Sept. 30 from a year earlier, after a 7.9 percent gain in the previous quarter, the statistics office said in a statement in New Delhi yesterday. The median forecast of 16 economists in a Bloomberg News survey was for 7.2 percent growth.

The assaults were the latest blow to investors after the worst global financial crisis since the Great Depression sparked this year’s 54 percent drop in the Sensex stock index, the biggest annual decline on record.

International investors sold a record US$13.5 billion in Indian equities this year as of Monday, according to data from the Securities and Exchange Board of India, as global credit losses and writedowns approached US$1 trillion. Investors bought a record US$17.4 billion last year.

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