January 17, 2013 / 11:13 AM / 5 years ago

Indian shares end higher; oil, IT stocks surge

* BSE index gains 0.74 pct; NSE ends 0.62 pct higher
    * Govt allows state-run companies to set diesel prices
    * Telecom stocks gain as India halves CDMA spectrum price
    * IT shares gain after HCL Tech beats earning estimates

    By Abhishek Vishnoi
    MUMBAI, Jan 17 (Reuters) - Indian shares advanced for the
third time in four days on Thursday, led by gains in state-run
oil companies after the government allowed them to set diesel
prices, despite uncertainty about the specifics of the
announcement. 
    The government on Thursday paved the way for state-run
Indian oil marketing companies to raise diesel prices in line
with increases in global crude oil prices, a move that could
help the government reduce its vast subsidy bill.
 
    India's No.4 software services provider HCL Technologies Ltd
 joined Infosys Ltd and Tata Consultancy
 in beating profit estimates, sending its shares up as
much as 7 percent and adding pressure on Wipro Ltd to
deliver strong results on Friday. 
    Analysts say fiscal consolidation alongside reversal of rate
cycle are equally important for the market to move higher from
current levels.
    "Increase in diesel prices is the first step towards coming
out of the twin deficit problem, so it should ensure better
times for the market ahead," said Deven Choksey, managing
director at KR Choksey Securities.
    The benchmark BSE index rose 0.74 percent, or
146.40 points, to end at 19,964.03.
    The broader NSE index rose 0.62 percent, or 37.35
points, to end at 6039.20, closing above the psychologically
important 6,000 level for the fourth day. 
    Shares in India's state-run oil marketing companies surged
after the government authorized them to set diesel prices.
 
    Hindustan Petroleum Corp gained 5.4 percent, while
Bharat Petroleum Corp gained 3.6 percent, and Indian
Oil Corp rises 6.4 up percent.
    Oil and Natural Gas Corp also rose 3.5 percent,
while Reliance Industries rose 3.3 percent, marking a
second day of gains, ahead of its earnings on Friday. 
    Technology shares gained after HCL Technologies beat
estimates with a 68.4 percent jump in quarterly profit. 
    Investors are betting that a good showing by the top
companies in India's $100 billion-a-year outsourcing industry is
an early sign of a broader pickup in IT spending. Reflecting
that optimism, the country's IT services subindex has
surged more than 13 percent in almost a week. 
    HCL Technologies gained 4.5 percent after hitting its
highest since February 2000. Infosys Ltd rose 1.1
percent while Tata Consultancy Services Ltd ended 1.06
percent higher.
    Wipro gained 2.6 percent after UBS raised its
ratings to 'buy' from 'sell', saying revenue momentum will start
picking up from the October-December quarter. 
    Reliance Communications rose 2.6 percent, while
Tata Teleservices Maharashtra ended 2 percent higher,
after India approved a 50 percent cut in the auction reserve
price for airwaves used by phone carriers on the CDMA platform.
 
    Asian Paints Ltd rose 1.3 percent after Morgan
Stanley initiated coverage of with an "overweight" rating and a
target price of 5,220 rupees. 
    However, among stocks that fell, India's Bajaj Auto
 dropped 1.1 percent after Deutsche Bank downgraded the
stock to 'hold' from 'buy', saying current valuations are
already factored in the company's "strong" margin performance
but do not account for the risks in an "uncertain" demand
environment. 
    UBS remained bullish on Indian shares, but said returns in
2013 would be front-loaded as the first half would be supported
by an easing rate cycle and on expectations of a
"market-friendly" budget for FY14.  
     
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Dollar rises against yen, more gains expected           
* Brent steadies near $110 after Algeria attack            
* Shares retreat on corporate worries, growth outlook 
* 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                                   
                         
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 (Additional reporting by Manoj Dharra; Editing by Anand Basu)

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