gopalakrishna

Indian stocks swept to a fifth successive advance yesterday after the coalition government won a crucial parliamentary confidence vote - paving the way for it to pursue stalled reforms.

The BSE Sensex index leapt 5.9 per cent to 14,942.28, its biggest one-day rise for four months and its highest close since June 19. The benchmark has now climbed 18.8 per cent over the course of the last week, although it remains 26 per cent down since the start of the year.

"Although markets were expecting the government to survive, the vote and the margin of victory removes the element of political uncertainty that has been dogging sentiment for some time," said Tushar Poddar, analyst at Goldman Sachs.

"We would stress, however, that the fundamental drivers of macroeconomic weakness - very high inflation, slowing growth, significantly higher interest rates, and a rising current account and fiscal deficit - remain in place."

Expectations that a landmark civil nuclear deal with the US would proceed helped power the equipment maker Bharat Heavy Electricals climb another 10.9 per cent to Rs1,772 while Larsen & Toubro , the engineering group, rose 7.6 per cent to Rs2,766.65.

There was a bullish tone to most other stock markets in the region as oil prices staged a sharp retreat and financials were boosted by gains for their US counterparts. In Tokyo, the Nikkei 225 Average rose 1 per cent to a two-week closing high of 13,312.93 while the broader Topix index ended 1.2 per cent higher at 1,303.35.

Mizuho Financial rose 4.3 per cent to Y583,000 and Sumitomo Mitsui added 3.2 per cent to Y877,000.

Property stocks also gained thanks to a positive analyst report on the sector. Sumitomo Realty & Development jumped 7.3 per cent to Y2,280 while Mitsubishi Estate gained 6.9 per cent to Y2,565.

Exporters were helped by the yen's drop against the dollar. Nintendo rose 3.1 per cent to Y57,000 and Honda Motor gained 2.8 per cent to Y3,700.

But oil and gas explorers sagged as crude declined. Inpex shed 4.2 per cent to Y1,106,000 and Cosmo Oil 3 per cent to Y327.

In Hong Kong, the Hang Seng index rose 2.7 per cent to a five-week high of 23,134.55.

Airline stocks, already lifted by the prospect of cheaper jet fuel, received a further boost from speculation about a possible merger between China Eastern , up 11.8 per cent at HK$2.65, and Shanghai Airlines , 4.1 per cent higher at Rmb6.56.

Elsewhere in the sector, Air China rose 5.6 per cent to HK$4.50 and Cathay Pacific 6.3 per cent to HK$15.64.

However, the composite index in Shanghai was hampered by weakness for coal producers and ended 0.3 per cent lower at 2,837.85. Panjiang Coal fell 7 per cent to Rmb25.68.

Australian stocks ended at a three-week high, led by financials. The S&P/ASX 200 rose 2 per cent to 5,105.3.

Macquarie , the investment bank, jumped 11.6 per cent to A$52 after it said it had made a solid start to the 2008-09 fiscal year. National Australia Bank rose 7.1 per cent to A$29.60 and Westpac added 7 per cent to A$22.00.

In Seoul, the Kospi index climbed 2 per cent to 1,591.76 as building stocks were helped by hopes of positive regulatory changes. Hyundai Engineering and Construction jumped 9.4 per cent to Won67,300.

In Singapore, the Straits Times index rose 3.1 per cent to 2,978.98, a four-week high, with property stocks leading the way. City Developments gained 8.4 per cent to S$11.70 and CapitaLand rose 7 per cent to S$6.15.

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