* BSE index gains 2.75 pct; NSE ends 2.81 pct higher
* Energy shares rally on gas price hike
* FIIs remain net sellers in cash shares
By Abhishek Vishnoi
MUMBAI, June 28 Indian shares rose nearly 3
percent on Friday, marking their biggest single day gain in
1-1/2 years, as energy firms such as Oil and Natural Gas
Corporation Ltd and Reliance Industries rallied after the
government approved a hefty increase in gas prices.
Shares were also helped by the recovery of the rupee from
the record low hit on Wednesday, allowing Indian stocks to post
their first weekly gain in four weeks, with the BSE index
ending up 3.5 percent.
Gains on Friday were broad-based, with 29 out of 30 BSE
index constituents ending higher. However, whether the gains can
be sustained will depend on foreign investors who have sold
121.90 billion rupees ($2.02 billion) worth of shares over the
previous 13 sessions.
The Indian government is gearing up to announce additional
fiscal and economic reforms, including opening up more sectors
to foreign investment, in an effort to narrow a current account
deficit that hit a record high of 4.8 percent in the previous
"More economic reforms centering around inflows of dollar,
probably on foreign direct investment, are seen coming which
should aid recovery in stocks," said G. Chokkalingam, executive
director & chief investment officer, Centrum Wealth Management.
The magntiude of recent outflows is very low in comparison
to the inflows received in 2013 and 2012, Chokkalingam added.
The benchmark BSE index rose 2.75 percent, or
519.86 points, to end at 19,395.81. Despite the weekly gain, the
index fell 1.8 percent lower for the month while rising about 3
percent for the quarter.
The broader NSE index rose 2.81 percent, or 159.85
points, to end at 5,842.20. It gained 3.1 percent for the week
but fell 2.4 percent June.
Shares in energy companies surged after the government's
approval of a hefty increase in gas prices suggests domestic gas
prices could rise to $8.4-8.5 per mmBtu with the new mechanism
from a current $4.2 mmBtu.
Oil and Naturas Gas Corp Ltd (ONGC) rose 3.4
percent, while Reliance Industries gained 3.9 percent.
Stocks beaten down earlier this week rose on value buying.
Mortgage lender Housing Development Finance Corporation Ltd
rose 5 percent, while ICICI Bank Ltd ended
3.9 percent higher.
Shares in Coal India Ltd surged 5.3 percent on
media reports the government would set up a coal regulator,
which could expedite decisions on pricing and clearances of
certain projects in the sector.
Shares in Yes Bank Ltd gained 4 percent after a
government committee approved the bank's proposal to increase
foreign equity participation up to 60 percent of the total
shares through a qualified institutional placement.
Crompton Greaves Ltd rose 9 percent after its
board approved a share buy-back of up to 2.66 billion rupees.
IFCI Ltd rose 18 percent while India Infoline Ltd
gained 4.1 percent after each said in separate
statements on Thursday they would apply to the Reserve Bank of
India for banking licenses.
Among stocks that fell, Shriram Transport Finance Company
Ltd lost 1.6 percent after India's central bank
imposed restrictions on Thursday on debt sales from non-bank
For additional stocks on the move double click
FACTORS TO WATCH
* Dollar rises versus yen in end-quarter trade
* Brent rises above $103 on talk Fed will continue stimulus
* Shares, bonds gain as Fed fears ease; gold slides
* 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.....
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
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
($1 = 60.2650 Indian rupees)
(Editing by Anupama Dwivedi)