REFILE-Indian shares at 2-yr high, state-run oil companies surge

Fri Jan 18, 2013 6:33pm IST

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(Corrects to remove extraneous word 'measures' in third
paragraph)
    * BSE index gains 0.38 pct; NSE ends 0.42 pct higher
    * Indian shares close at 2-year high
    * Tech stocks fall after Wipro's earnings results
    * Hero MotoCorp to underperform Sensex - Morgan Stanley

    By Abhishek Vishnoi
    MUMBAI, Jan 18 (Reuters) - India's benchmark index 
rose on Friday to close above 20,000 for the first time in two
years, led by gains in state-owned oil and gas companies such as
ONGC, which surged for a second consecutive session after the
government's diesel price hike was seen reducing their subsidy
burden.
    The government, which fixes the retail price of diesel, told
retailers on Thursday to raise the price of the subsidised fuel
in small amounts every month, a move aimed at propping up public
finances that should also improve revenues in the
sector. 
    Traders are now expecting more talk of fiscal consolidation
in the coming days, even as December quarter earnings reports
pick up pace, ahead of RBI's policy review meeting on Jan. 29. 
    "Q3 earnings are important in the near term, but for the
medium term monetary policy on Jan. 29 would be the main
trigger, followed by budget next," said Phani Sekhar, fund
manager at Angel Broking.
    The benchmark BSE index rose 0.38 percent, or 75.01
points, to end at 20,039.04, closing above the psychologically
important level of 20,000 for the first time since Jan. 6, 2011.
The index added 1.9 percent in the week.
    The broader NSE index rose 0.42 percent, or 25.20
points, to end at 6,064.40, adding 1.9 percent in the week.
    Besides Reliance Industries December quarter
earnings later in the day, traders would watch earnings reports
of many large cap stocks next week, including Hindustan Unilever
 on Tuesday, and those of Larsen & Toubro and
Maruti Suzuki India later in the week. 
    Shares in state-run oil firms surged for a second day on
Friday, with producer Oil and Natural Gas Corp Ltd 
ending 7.4 percent higher while Oil India Ltd rose 8.7
percent.
    Among refiners, Hindustan Petroleum Corp Ltd 
gained 5.4 percent and Indian Oil Corp rose 10.6
percent, while Bharat Petroleum Corp Ltd ended 9.8
percent higher.
    However, Nomura said the rally in India's state-run oil
companies on Friday was excessive and that the government's move
to incrementally reduce diesel prices would not lead to any
improvement in the bottom line of these companies.
 
    Maruti Suzuki gained 3.6 percent on hopes the
diesel price move would reduce chances of the government
imposing duties on diesel vehicles, a scenario some investors
had fretted over. 
    ITC Ltd, India's biggest cigarette maker, rose 0.8
percent after it beat estimates with a 21 percent rise in
quarterly profit as cigarette volumes improved after four
quarters of stagnant growth, aided by the launch of low-cost
products during the quarter. 
    Shares in India's National Thermal Power Corporation
 rose 4.7 percent ahead of its December quarter
earnings on Monday.
    However, among stocks that fell, India's No.3 software
services provider Wipro Ltd ended 7.7 percent lower,
after a less-than-perfect score on its quarterly earnings report
card threw a measure of doubt over the sector's near-term
outlook, with new projects and contracts still elusive.
 
    Among other IT stocks, Tata Consultancy Services 
fell 0.8 percent, while Infosys ended 0.4 percent
lower.
    Shares in Hero MotoCorp, India's largest
motorcycle maker, fell 3 percent after it missed estimates for
the fourth straight quarter as net profit fell 20.4 percent on
rising costs and falling sales that battered margins.
 
    Morgan Stanley said Hero MotoCorp's shares could fall
relative to India's benchmark index over the next 60 days on the
back of "disappointing" Q3 earnings. 
    India's No.3 lender, HDFC Bank, fell 0.6 percent,
after its December quarter profits came in line with forecasts
with a 30 percent rise in quarterly profit on Friday, led by
higher loan growth, better fee income and stable asset quality.
    
    For additional stocks on the move double click       
     
   FACTORS TO WATCH                                             
* Yen hits 2-1/2 year low, bold BOJ easing eyed           
* Brent holds above $111, supported by China growth data   
* Chinese, U.S. data push shares to 20-month 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 Jijo Jacob)
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