Stocks gain for third week as rate increase meets forecast

The benchmark stock index advanced, gaining for a third straight week, after the nation's central bank increased interest rates in line with forecasts.

The Sensex, rose 57.29, or 0.3 per cent, to 16,933.83, after surging 1.5 per cent intraday. It gained 0.4 per cent this week. The S&P CNX Nifty Index on the National Stock Exchange of India advanced 0.2 per cent to 5,084.25, while its September futures traded at 5,087. The BSE-200 Index added 0.3 per cent.

Tata Motors Ltd, the nation's biggest truck maker, surged 7 per cent, the most since March 2010. The Reserve Bank of India raised its repurchase rate to 8.25 per cent from 8 per cent, it said in a statement on Friday. “The rate hike was already priced in,” Jitendra Panda, the Mumbai-based head of broking at Future Capital Holdings Ltd., said by phone. “Markets will see a consolidation and not much correction now.”