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Last Updated: Thursday, 2 March 2006, 16:19 GMT
Nuclear deal boosts Indian shares
A view of Mumbai's stock exchange
India's economy is being recognised as a global power
Indian shares jumped to record highs after a US agreement to share civilian nuclear technology and fuel.

Bombay's benchmark Sensex index rose 0.6% to a record closing level of 10,627 after briefly passing 10,700.

There were big gains across the index, particularly power generators and equipment firms like Bharat Heavy Electricals and Tata Power.

Investors bought in to construction and energy firms in the hope that they will get work building nuclear power plants.

Infrastructure needs

Market sentiment was also boosted because investors felt the nuclear agreement was an endorsement of India's emergence as a global economic power.

"The nuclear deal is encouraging, because it seems like the US agreed to it without India having to give up or give in too much," Rajesh Jain, chief executive of brokers Pranav Securities, told the BBC.

"It is a confirmation of India as a global economic and political entity in the larger scheme of things and companies stand to benefit from it."

Nuclear energy is seen as a vital source of power for the country's rapidly growing industries.

The nuclear deal was announced during US President George W Bush's first visit to India.

US and Indian officials used the opportunity to discuss ways boosting US investment in the country, particularly for infrastructure projects like building roads, airports, power stations and refineries.

India needs $150 billion in infrastructure investment each year to sustain the annual 8% growth rate it is seeing in its economy.

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