UPDATE 1-Indian shares gain ahead of parliament vote; Reliance leads

Tue Dec 4, 2012 4:54pm IST

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* BSE index gains 0.22 pct; NSE ends 0.31 pct higher
    * Retail shares end lower ahead of crucial parliament vote
    * Hopes of OMO, other monetary measures seen helping banks

    By Abhishek Vishnoi
    MUMBAI, Dec 4 (Reuters) - Indian shares edged higher on
Tuesday, rising for the fifth day in the last six sessions, led
by gains in Reliance Industries, on hopes the
government will soon approve the company's investment plans for
the KG-D6 block.
    Analysts said markets would closely track the progress on a
crucial vote in the parliament on foreign direct investment in
multi-brand retail sector and other reform initiatives for the
near term. 
    Hopes of more open market operations and some monetary
easing by the Reserve Bank of India by December-end also aided
sentiment.
    "Going ahead, market's movement will depend on the
parliament's behaviour. If the government wins the FDI vote, it
will be taken positively, but if they lose then selling cannot
be ruled out," said R.K. Gupta, managing director at Taurus
Mutual Fund.
    However, there are apprehensions that while the government
will be able to muster support for the bill in the Lok Sabha, it
will still remain pending in the Rajya Sabha, Gupta added.
    The benchmark BSE index gained 0.22 percent, or
42.80 points, to end at 19,348.12.
    The broader NSE index rose 0.31 percent, or 18.30
points, to end at 5,889.25, finding resistance around
psychologically important 5,900 level.
    Reliance Industries rose 2.6 percent, marking its
highest single day percentage gain since Sept. 17, on a report
in the Economic Times newspaper that the oil ministry is poised
to approve the company's investment plans for the controversial
KG-D6 block, citing government sources. (link.reuters.com/vyn44t)
    Banking shares also rose on hopes of more central bank
action, dealers said. 
    ICICI Bank ended 1.55 percent higher after earlier
hitting a new 52 week high of 1122.60 rupees, while State Bank
of India gained 1.6 percent, marking its sixth day of
gains. 
    Earlier in the day, the RBI conducted an auction to buy up
to 120 billion rupees of debt, including the benchmark 8.15
percent 2022 bond and the 8.19 percent 2020 bond.
    Shares in Jaiprakash Power Ventures Ltd gained 9.9
percent after its parent company, Jaiprakash Associates Ltd
, said the Amelia North coal mine has received the
final Stage II forest clearance for diversion of 728.75 hectares
of forest land for coal mining. 
    "Mine clearance has certainly been one of the important
catalysts for JPVL's stock performance and removes a difficult
overhang," Deutsche Bank said in a report. 
    Aurobindo Pharma Ltd rose 3.4 percent on hopes the
company would get approval from U.S. drug regulators for a new
plant in the coming few weeks, dealers say.
    However, among stocks that fell, Hero MotoCorp Ltd 
dropped 0.6 percent after Bank of America Merrill Lynch
downgraded the stock to 'underperform' from 'buy' and cut its
target price to 1,650 rupees from 1,980 rupees.
    The bank said it expects the company's domestic sales to
remain muted and in "single digits" due to its dependence on
100cc bikes where better options are available with competitors,
and likely structural shift to 150cc plus premium bikes where
the "company's franchise is weak". 
    Larsen & Toubro Ltd fell 0.5 percent after
Jefferies said the company needs to announce additional projects
worth 54 billion rupees this month to meet expected order flow
of 180 billion rupees for the third-quarter.
    Shares in India's Jet Airways ended 4.6 percent
lower on profit-taking, after earlier gaining as much as 7.1
percent intraday, on reports that it may sell a 24 percent stake
to Etihad Airways. 
    Retail shares such as Pantaloon Retail India ended
marginally lower at 0.2 percent, ahead of the parliament vote.
    For additional stocks on the move double click       
     
   FACTORS TO WATCH                                             
* Euro rises to 6-week high against Swiss franc           
* Oil slips towards $110 on economic, budget worries       
* U.S. worries subdue shares, Greek deal lifts euro  
* 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      <ECONASIA 

 (Additional reporting by Manoj Dharra; Editing by Anand Basu)
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