Indian Stocks Rise Despite Deadly Bombings

The bombings that rocked India's financial hub, Mumbai, are unlikely to slow India's fast growing economy or harm investor confidence, business leaders insisted Wednesday, saying the world has learned to live with the risk of terrorism.

Their confidence was matched by the market Wednesday with Indian stocks up 3 percent.

Foreign companies ranging from IBM Corp. (IBM) to Merrill Lynch (MER) joined Indian firms in denouncing the deadly bombings.

CountryWatch: India

All assured nervous investors that the eight bombs that ripped through Mumbai's commuter rail network during the evening rush hour Tuesday would have little impact on India's economy, which has been expanding about 8 percent a year, making it one of the world's fastest growing.

"This stuff happens everywhere. We have learned to live with it," William Ireland, a director at IBM in India, told The Associated Press.

Speaking in Bangalore, a southern city that is the hub of India's lucrative high-technology and outsourcing industries, he said the bombings had no impact on the services that IBM offers to 250 global clients from its India.

The attacks in Mumbai had prompted fears Indian shares would plunge.

Instead, the stock market rose Wednesday — boosted by strong earnings results from Infosys Technologies, one of the nation's biggest software companies.

"All investors live with this risk (of terrorism) today," said Andrew Holland, a Merrill Lynch executive based in Mumbai. "A year ago it was London, now it has happened in Mumbai."

Holland said the market's resilience was a reflection of strong fundamentals of the Indian economy.

Indian Finance Minister P. Chidambaram agreed.

"These cowardly and dastardly attacks cannot break our will or resolve," he told reporters. "India's growth story is intact. No need to worry about the Indian economy."

Chidambaram said that foreign investors "still have confidence" in India and should continue to do so. "Solitary attacks cannot set back economic activity all over India, and even in Mumbai," as Mumbai is also known, he said.

Even as the attacks jolted residents of Mumbai, India's software companies reported more work being transferred by global companies to India.

Infosys Technologies Ltd. said it added 38 new clients during the April-June quarter, adding that its net profit jumped 44 percent to $174 million, surpassing expectations.

The earnings report from Infosys played a key role in pushing stocks up Wednesday.

Projecting strong outsourcing orders in the year ahead, the company also raised its earnings forecast for the fiscal year through March. Cheered by that outlook, investors snapped up shares of other technology companies, which lifted the benchmark 30-share Sensex 3 percent to close at 10,928.

Indian business leaders vowed not to let the attacks derail the economy.

"This is an act of cowardice," Anil Singhvi, director of Gujarat Ambuja Cement, told NDTV. Singhvi said employees at his company were "saddened" but people were already back at work.

"No factory is shut, schools are open, people are going to jobs," said Rahul Bajaj, chairman of motorcycle maker Bajaj Auto Ltd. "We have to carry on with life."

Still, incidents like those in Mumbai are forcing companies to increase spending on security. In Bangalore, security was beefed up outside facilities of multinational companies like Dell Inc. (DELL), Microsoft Corp. (MSFT) and IBM.