NSE closes above 5,900 on hopes of favourable FDI vote

Wed Dec 5, 2012 5:02pm IST

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* BSE up 0.23 pct; NSE adds 0.19 pct
    * Retail shares rally ahead of parliament vote on FDI in
multi-brand retail
    * Indian tech shares drop after Cognizant SEC filing

    By Manoj Dharra
    MUMBAI, Dec 5 (Reuters) - Indian shares gained on Wednesday
for the sixth time in seven sessions on hopes the government
will muster a majority in parliament on a crucial vote to allow
foreign direct investment in multi-brand retail later in the
day. 
    Shares in organised retailers such as Pantaloon Retail India
Ltd and Shoppers Stop rallied on hopes of a
favourable vote for the government.
    Traders said optimism ahead of the parliament vote, that
will pay the way for more reforms, have triggered a rally in
mid-cap and small cap indexes and is a sign of structural
bullishness in the market. 
    "Markets remained cautiously optimistic before the eve of
the event in the Parliament," said Kaushik Dani, a fund manager
at Peerless Mutual Fund.
    "Sentimentally, a lot of things are leaning towards what is
going to happen today." 
    The BSE index gained 0.23 percent, or 43.74 points,
to end at 19,391.86, its highest close since April 27, 2011.
    The broader NSE index rose 0.19 percent, or 11.25
points, to end at 5,900.50 for the first time since April 13
2011, clearing the psychologically important 5,900 level.
    Shoppers stop rose 7.53 percent, closing at
464.70, its highest since July 25, 2011, while Pantaloon Retail
 gained 3.26 percent to end at 237.65, its highest
close since Sept. 22, 2011.
    State Bank of India rose 1.44 percent after a
senior executive told reporters that the Indian government is
looking to infuse 40 billion rupees ($732 million) in the bank. 
 
    Other state-run banks that gained were Punjab National Bank
, which rose 3.42 percent and Bank of India,
which ended up 2.3 percent.    
    Tata Motors rose 1.25 percent, buoyed by a Morgan Stanley
report which maintained its 'overweight' rating and said it is
optimistic of a strong rebound in sales in the January to March
quarter. 
    Property developer DLF Ltd jumped 4.5 percent,
posting its biggest gains since Oct. 4 on hopes of a strong
pick-up in launches in the second half of FY13, dealers said.
     All major tyre makers gained. Apollo Tyres rose
2.25 percent, Ceat Tyres added 2.6 percent, MRF was up
4.13 percent, while JK Tyres & Industries was 4.4
percent higher.
     The gains tracked a fall in the price of rubber, a key raw
material which constitutes nearly 40 percent of the production
cost of tyres. Rubber futures have fallen 6.4 percent
in five previous trading sessions. 
     However, technology shares fell on fears that Cognizant
Technology Solutions Corp may lower its revenue growth
guidance for 2013 based on compensation targets for top
executives.
    Sentiment was also dampened by Cowen's downgrade of Infosys
Ltd to 'neutral' on Tuesday due to fears of a
protracted revenue growth recovery.
    Infosys ended down 2.25 percent, Wipro Ltd fell
1.8 percent and HCL Technology dropped 1.4 percent. 
 For additional stocks on the move double click        
      
   FACTORS TO WATCH                                             
* Euro falls to low against dollar after Spanish auction 
* Brent rises above $110 on China growth hopes            
* Shares rise on China hopes, euro hits 7-wk high    
* 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

    

 (Editing by Prateek Chatterjee)
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