Indian shares edge up to 2-yr highs; earnings eyed

Fri Jan 4, 2013 5:14pm IST

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* BSE index gains 0.1 pct; NSE ends 0.11 pct higher
    * India VIX 2.5 percent away from its all-time lowest close
    * Oil shares rally on gas, diesel price hike hopes

    By Abhishek Vishnoi
    MUMBAI, Jan 4 (Reuters) - Indian shares edged higher on
Friday to touch two-year highs, posting their strongest weekly
performance since the end of November, as oil companies such as
ONGC rose on hopes a proposed change in the government's pricing
formula would boost gas prices.
    Software services exporters such as Tata Consultancy
Services also rose on expectations upcoming
October-December earnings results would beat expectations and
that the sector would guide for an improved outlook in 2013. 
    Infosys will kick off earnings on Jan. 11, at a
time when results are gaining particular relevance given some
analysts worry about potential complacency after strong gains in
2012 have continued into the new year. 
    India VIX, also considered by some investors as a
fear gauge, is just 2.5 percent away from its all-time lowest
close. 
    "We have already seen advance tax numbers, so in the near
term one has to see how the earnings season pans out," Kaushik
Dani, fund manager at Peerless Mutual Fund, said. 
    "One has to remain stock specific on how the numbers shape
up for the quarter," Dani said. 
    The benchmark BSE index rose 0.1 percent, or 19.30
points, to end at 19,784.08, marking a fourth consecutive
session of gains.
    The index rose 1.74 percent for the week, its strongest
weekly performance since the end of November.
    The broader NSE index rose 0.11 percent, or 6.65
points, to end at 6,016.15, closing above the psychologically
important 6,000 level for a second day. It rose 1.8 percent for
the week.
    Shares in upstream oil and gas companies rallied on hopes
that the pricing formula recommended by a government-appointed
panel that looked into oil and gas exploration contracts would
be approved by the government.
    The proposed changes would sharply raise the prices of
domestic natural gas, analysts said. 
    Oil and Natural Gas Corporation shares gained 1.8
percent, while Oil India rose 2 percent.
    Reliance Industries Ltd rose 0.13 percent, gaining
less than its peers after the market regulator rejected its
request to settle a long-pending dispute over the 2007 sale of
stock futures in a unit. 
    State-owned oil companies gained on expectations India could
soon announce a potential gradual hike in diesel prices, after a
government official last month was quoted in local media saying
a proposal was being considered. 
    Among refiners, Indian Oil Corp rose 3.5 percent,
Hindustan Petroleum Corp gained 5.3 percent and Bharat
Petroleum Corp ended 2.12 percent higher.  
    Expectations of better-than-expected quarterly earnings
lifted technology stocks.
    Tata Consultancy Services Ltd rose 1.45 percent,
while Wipro Ltd ended up 1.5 percent higher.
    Infosys, which kicks off earnings on Friday, rose 0.5
percent. The company denied a newspaper report it was planning
to fire up to 5,000 poorly performing workers was "wrong",
although it encourages "chronic underperformers" to leave as
part of its routine staff management. 
    IFCI shares gained 11.4 percent after the
government restructured the board of the project finance
provider according to a stock filing, sparking hopes of a
turnaround in operations. 
    However, Tata Steel ended 1.9 percent lower while
Jindal Steel and Power fell 1.8 percent on profit
taking, after gaining on the back of a rise in international
metal prices after the end of the US "fiscal cliff" issue.

   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Dollar hits 29-month high vs yen; may gain on payrolls  
* Brent falls below $111 after Fed minutes                 
* Shares, oil slip on Fed stimulus nerves            
* 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:                                              
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U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                         
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 (Additional reporting by Manoj Dharra; Editing by Subhranshu
Sahu)
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