Indian shares gain 3.82 percent to new record close

MUMBAI, Oct 29, 2007 (AFP) – India’s benchmark share index surged 3.82 percent to a new record close on Monday and crossed 20,000 points for the first time, a gain of nearly 4,000 points in the past six weeks, dealers said. They said hopes that the Reserve Bank of India (RBI) may cut key interest rates at a quarterly review on Tuesday with inflation at a five-year low boosted sentiment.

The benchmark 30-share Mumbai stock exchange Sensex index closed up 734.5 points to 19,977.67, beating its previous record of 19,243.17 set on Friday.

The Sensex hit a new intra-day high of 20,024.87 in late trade on Monday.

“The markets surge is led by liquidity and an improved outlook for emerging markets like India,” said Milind Pradhan, head of equities with UTI Securities.

Sentiment also improved as India’s Finance Minister P. Chidambaram said on Monday that the economy was likely to expand at nearly nine percent in the financial year to March 2008.

At Monday’s close, the Indian markets had surged nearly 45 percent for the year, led by overseas fund flows of around 18 billion dollars and optimism of sustained economic and quarterly earnings growth.

The Indian market has risen more than six percent in the p