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Confidence in stock market restored after Indian bail-out
9/2/2002 1:10:00 PM

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BOMBAY, India -- A 145bn rupee ($3bn; £1.9bn) government bail-out of the country's largest mutual fund has reassured investors and boosted the Indian stock market.

On Saturday, Finance Minister Jaswant Singh announced measures to support the cash-strapped Unit Trust of India (UTI), including funds to repay investors.

Bombay share index closed up 0.19% at 3,187.26 points, after rising as much as 1.45%.

On Friday it gained 2.15% to hit a 6-week high in anticipation of the announcement.

UTI controls over half of India's $20bn mutual fund industry and is a major investor in India's leading companies. It shocked investors last year by freezing redemptions from its key US-64 fund as stock market falls and high redemptions caused a cash crisis.

The freeze was partially lifted until May 2003 after public outrage and a parliamentary debate, and on Saturday extended until next year by Mr Singh.

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