November 22, 2012 / 11:14 AM / 5 years ago

Indian shares turn positive for November; government reforms key

* BSE index gains 0.31 pct; NSE ends 0.23 pct up
    * Hindustan Copper, Blue Dart surge ahead of stake sale
    * Pharma stocks fluctuate on pricing policy talks

    By Abhishek Vishnoi
    MUMBAI, Nov 22 (Reuters) - Indian stock indexes edged higher
on Thursday, turning positive for the month, as a weaker rupee
boosted IT shares such as Infosys, while banking stocks such as
SBI rose on the first day of the winter session of parliament.
    Sentiments also got a boost by the government's move to
allow state-run Life Insurance Corp (LIC) to triple the maximum
stake it can hold in other companies to 30 percent.
 
    Investors are hoping that the government, caught between a
tough macro environment and twin deficits, would have little
choice but to pass some of the proposed bills to open up the
insurance, pension and banking sectors in the winter session of
the parliament.
    "The reforms process has commenced once again which is a
good launching pad for the market," said Kishor P. Ostwal,
chairman and managing director of CNI Research Ltd.
    LIC being allowed to raise its stake to 30 percent in
companies will pave the way for disinvestment clearance, which
in turn will address the key concern of fiscal deficit, added
Ostwal.
    The benchmark BSE index rose 0.31 percent, or 56.96
 points, to end at 18,517.34, rising for the second day.
    The broader NSE index rose 0.23 percent, or 12.95
points, to end at 5627.75.
    Software services stocks were among the leading gainers,
tracking the weakening Indian rupee. 
    Infosys Ltd rose 1.4 percent, while Wipro Ltd
 gained 1.1 percent.
    Banking stocks rose on hopes the parliament will pass bills
to liberalise the insurance, pension and banking sectors.
    The government's decision on allowing LIC to raise its stake
in companies to 30 percent is also helping banks, dealers say. 
    State Bank of India gained 1.8 percent, after
falling 2.3 percent in November as of Wednesday's close. Axis
Bank Ltd gained 1.7 percent.
    State-controlled Hindustan Copper surged 11.27 percent,
after falling as much as 6.4 percent, after the government said
it would sell a 4 percent stake in India's third-largest copper
producer on Friday. 
    Select consumer stocks also gained after Deutsche Bank
recommended being selective in the sector. It said high
inflation and weak job creation may weigh on the sector, even as
the broader growth outlook and investment arguments remain
compelling.
    Deutsche said it prefers companies with "multiple levers to
manage growth," and those with strong pricing power, ability to
expand distribution, and with a track record of innovation to
manoeuvre a potential slowdown. 
    As a result, the investment bank recommended ITC Ltd
, Marico Ltd and Titan Industries as
its top 'buy' stocks in the consumer goods space.
    ITC rose 1 percent and Marico 1.3 percent, while Titan
Industries fell 1.1 percent.
    However, Dabur India fell 1.3 percent after
Deutsche downgraded stock to 'sell' from 'hold', citing slowdown
in volumes. 
    Shares in Blue Dart Express rose to the maximum
daily limit of 20 percent on hopes that plans by its main
stakeholder DHL Express (Singapore) Pte Ltd to sell a 6 percent
stake will attract strong demand, raising prices.
 
    Blue Dart said on Wednesday DHL Express (Singapore), part of
DHL, will sell a 6 percent stake in the Indian air
express courier firm via an offer-for-sale to comply with SEBI's
regulation that all companies must have at least 25 percent
public shareholding by next year. 
    Among other stocks that fell, Siemens India 
declined 1.3 percent ahead of its audited FY12 earnings results
on Friday.
    Shares in Indian drugmakers fell on speculation the
government's final decision on the pricing policy for the sector
might be more disruptive than expected. 
    Local media reports suggest a panel of ministers has agreed
to settle on a market-based pricing mechanism, as expected, but
capping drug prices at a simple average price of brands as
opposed to the initial proposal of using a weighted average. link.reuters.com/jur24t
 
    Cipla fell 0.6 percent, while Ranbaxy Laboratories
 ended 0.9 percent lower. 

   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro extends rise vs sliding yen as Greek worries fade  
* Brent holds near $111 on promising China data            
* European shares lifted by China, U.S. factory data 
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
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 (Editing by Anupama Dwivedi)

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