Indian shares end up at 19-month high on reform optimism

Thu Nov 29, 2012 5:05pm IST

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Stocks

   

* BSE ends 1.75 pct up; NSE closes 1.7 pct higher
    * Govt agrees to vote on supermarket reform
    * Goldman Sachs upgrades Indian stocks

    By Manoj Dharra
    MUMBAI, Nov 29 (Reuters) - Indian shares  
surged on Thursday to close at their highest in 19 months after
the government agreed to a vote in parliament on allowing
foreign entry in multi-brand retail, raising hopes that key
reforms will pass through.
    Shares were further boosted after Goldman Sachs upgraded
Indian stocks to 'overweight' from 'market-weight', citing
growth recovery and inflation moderation ahead. The investment
bank pegged the December 2013 Nifty target at 6,600
points. 
    Traders say Moody's stable outlook on India has also eased 
a potential ratings downgrade worries from Standard & Poor's and
Fitch in the near term, adding to positive sentiment.    
    The rupee also appreciated by more than 1 percent versus the
dollar, further helping the markets. Globally, shares rose on
Thursday after a senior U.S. lawmaker said the "fiscal cliff"
might be resolved.
    "India is far larger than just retail, but there is some
significance attached to it, so if FDI goes through, it will
imply the government means business," said Paras Adenwala, MD &
Principal Portfolio Manager, Capital Portfolio Advisors.
    "Even if some bills are cleared in the ongoing session of
parliament, it would be taken constructively by investors."
    The BSE index ended up 1.75 percent, or 328.83
points, at 19,170, its highest close since April 28, 2011
    The 50-share NSE index gained 1.7 percent, or 97.55
points, to 5,825.00, on the last day of the November F&O series
with high volumes. This was its highest close since April 27,
2011. 
    The market is awaiting the September-quarter gross domestic
product data due to be released at 0530 GMT on Friday, with
growth seen slowing to its lowest in nearly a decade for the
year ending in March.
    Rate-sensitive stocks such as ICICI Bank Ltd 
rallied on hopes the central bank may cut policy rates if it is
satisfied with government measures to reduce fiscal deficit.
    Banks also rose on hopes that government would raise the cap
on foreign direct investment in insurance, and open the pension
sector to foreign investors, tracking new-found optimism around
FDI in retail. 
    ICICI Bank rose 4.6 percent, while HDFC Bank Ltd 
gained 2.8 percent.
    Among other rate-sensitive stocks, Tata Motors Ltd 
rose 4.4 percent, while Bajaj Auto Ltd ended 4.7
percent higher.
    Delhi-based property developers surged, with DLF Ltd
 rose 1.6 percent and Unitech gained 8.6
percent.
    Among capital goods stocks that surged were Larsen & Toubro
, which rose 2.43, while Punj Lloyd Ltd added
3.74 percent.
    Cinemax India Ltd, a theatre chain operator, rose
5 percent after it said its controlling shareholders will sell a
69.27 percent stake in the company to local rival PVR Ltd
 for 3.95 billion rupees ($71 million). 
    Shares in PVR also gained 6.4 percent. 
    However, among stocks that fell, India's GMR Infrastructure
Ltd fell 1.4 percent after Maldives cancelled its
biggest foreign investment project, a $511 million deal with GMR
to develop an international airport. 
    Shares in Apollo Hospitals Enterprise fell 8.1
percent a day after a source said brokerage CLSA is selling its
stake for $135 million. 
    Several block deals were struck in shares of Apollo
Hospitals in the range of 821.75-836 rupees on the BSE and NSE,
according to Reuters data. 
    
    For additional stocks on the move, double click      
 
   
         
    FACTORS TO WATCH                                            
 
* Euro rises on optimism of U.S. fiscal cliff deal        
* Oil up on US budget optimism, Middle East tension        
* U.S. budget deal hopes buoy shares and commodities 
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                           
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                            
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                           
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                             
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data      

 (Additional reporting by Abhishek Vishnoi; Editing by Prateek
Chatterjee)
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