Sterlite Industries shares rise as prices of base metals increase

On June 21, 2010, Indian share prices observed significant rise after China announced to do away with Yuan’s fixed rate against dollar. Share prices at BSE rose to their highest in more than two months as investors were encouraged to take more risks.

Share prices of Sterlite Industries jumped 7.3% followed by Tata Steels at 4.6 percent and Hindalco at 4.3 percent.

Shares of Larsen & Toubro Ltd., the largest private-sector infrastructure company in India, rose to the highest in four months.

On June 19, 2010, The People’s Bank of China announced that it was ready to make Yuan more flexible as the global economy is recovering form recession and the country is observing a balanced trade. The announcement resulted into the rise in prices of copper and other base metals on June 21, 2010.

At 10.57 a.m ( 0527 GMT) Sensex at the BSE rose to 17,893.71 points, a 1.83 percent rise since the middle of April when it observed a high of 17,894.04 points. All the components of BSE Index observed an upward movement.

The BSE Index advanced 5.6 percent in June after declining 3.5 percent in May.

Ambareesh Baliga, Vice-President, Karvy Stock Broking, said, "China's yuan move is helping risk-taking ability. Also,commodities are doing very well, helping the market further.....”

Insurance companies would also get a big encouragement to invest as the government will allow life insurers to offer “unit-linked plans.”