BSE Sensex up 0.4 pct; Reliance leads

MUMBAI (Reuters) – The BSE Sensex rose 0.4 on Monday morning, led by energy giant Reliance Industries after it made an offer to buy a controlling interest in U.S.-based bankrupt petrochemicals company LyondellBasell Industries.

Reliance, which has the largest weighting in the index, was up 1.4 percent at 2,154.50 rupees.

"The difference between any other large acquisition and this one is that this deal is being pursued at the time of a downcycle in petchem space, making valuations cheap," said Vaibhav Sanghavi, director of Ambit Capital.

"Also, Reliance has always had a comfortable balance sheet. That, along with the synergies and existing liquidity is helping the stock," added Sanghavi.

Reliance, the country's largest-listed firm, is offering about $12 billion for control of LyondellBasell, according to sources, and if successful it would be one of the largest

overseas acquisitions by an Indian company.

At 10:22 a.m. (0452 GMT), the 30-share BSE Index was up 0.41 percent at 17,091.75, with 22 components gaining.

"I think we can hold on to the gains in the day as dollar is weak for now. We should close in the green today," said Gajendra Nagpal, CEO of Unicon Financial.

Positive Asian markets also helped sentiment, with MSCI's measure of Asian markets other than Japan rising 0.6 percent. Japanese markets were closed for a public holiday.