Indian shares gain nearly 2 pct; RBI policy stance key

Fri Jun 14, 2013 4:53pm IST

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* BSE index gains 1.86 pct; NSE ends 1.92 pct higher
    * Reliance Industries gains on reserve hopes
    * Apollo Tyres fails to stem stock slide on Cooper deal

    By Abhishek Vishnoi
    MUMBAI, June 14 (Reuters) - Indian shares snapped a
three-session losing streak to gain nearly 2 percent on Friday,
after Reliance Industries surged on hopes one of its blocks held
higher gas reserves while lenders rallied after easing wholesale
inflation raised hopes of a rate cut.
    Shares also tracked a rally in Asian markets following a
bruising selloff in global markets, which had sent the Indian
rupee to record lows and helped push the benchmark BSE
index down 1.3 percent for the week.
    Investors are now looking ahead at the Reserve Bank of
India's policy review on Monday as the next key trigger, along
with movements in global markets.
    Although most analysts expect the central bank to keep rates
on hold, an outside chance was seen after India's headline
inflation slowed for a fourth straight month in May to 4.7
percent from a year earlier. 
 
    "The RBI meeting on Monday will be an important trigger for
the market. Expectations are mixed on whether the RBI will cut
rates or not," said Dipen Shah, head of Private Client Group
Research, Kotak Securities.
    Markets are pricing in some roll-back of stimulus by the
U.S. Federal Reserve as well, but if it maintains status-quo,
there can be further respite to the markets, added Shah.
    The benchmark BSE index rose 1.86 percent, or
350.77 points, to end at 19,177.93, marking its biggest
single-day gain since May 15, although it was not enough to
prevent the index from posting its second consecutive weekly
fall.
    The broader NSE index rose 1.92 percent, or 109.30
points, to end at 5,808.40, closing above the psychologically
important 5,800 level but 1.2 percent lower for the week.
    Reliance Industries Ltd gained 3.2 percent after
its KG-D6 block partner Niko Resources Ltd said its
proved reserves increased by 160 percent, and that a recent gas
discovery in the D6 block off India's east coast could add
significantly to future reserves. 
    Lenders rallied after easing wholesale inflation raised rate
cut hopes. The NSE banking index fell 2.5 percent for
the week, a fourth consecutive weekly drop. 
    ICICI Bank Ltd gained 3.1 percent and Axis Bank
Ltd rose 2.2 percent.
    Tata Motors Ltd gained 4.9 percent ahead of unit
Jaguar Land Rover Ltd's global wholesale numbers
expected later in the day.
    Tata Coffee Ltd climbed 6.3 percent on value
buying after falling 25 percent in previous two sessions.
    Maruti Suzuki India Ltd shares rose 4 percent on
value buying after falling about 8 percent in the last five
sessions. Traders also say the yen looks overbought
versus the dollar in the short term and therefore may weaken,
generating a tactical buy call on Maruti. 
    However, among stocks that fell, Apollo Tyres Ltd 
fell 5.5 percent, losing about a third of its market value over
two days as investors fretted over the debt it will take on to
fund its $2.5-billion acquisition of U.S.-based Cooper Tire &
Rubber Co. 
       
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Dollar weak but rising stocks provide some support      
* Brent slips on ample U.S. inventory, weak outlook        
* Shares, dollar steady after sharp selloff          
* 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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