June 3, 2014 / 10:48 AM / 4 years ago

Indian shares hit record closing high; metal stocks surge

* BSE index gains 0.7 pct; NSE ends 0.72 pct higher
    * India cbank keeps key rate unchanged, loosens credit
    * Zee Entertainment gains; RBI lifts FII limit

    By Abhishek Vishnoi
    MUMBAI, June 3 (Reuters) - Indian shares rose on Tuesday to
a record closing high as metal stocks such as Tata Steel
 surged after surveys showed China's factory and
services sectors had their best performance in months, while the
central bank held rates steady and toned down its inflation
rhetoric.
    China's factory sector turned in its best performance in
four months in May as export orders improved although activity
still contracted, a private survey showed on Tuesday, adding to
signs the economy may be stabilising. 
    Sentiment was also supported after the Reserve Bank of India
eased rules to spur bank lending and toned down its inflation
rhetoric in moves set to be welcomed by a new pro-business
government determined to revive economic growth. 
    "I am hopeful that we may see a rate cut soon provided the
government's administrative actions finally succeed in reducing
food inflation," said Motilal Oswal, chairman and managing
director at Motilal Oswal Financial Services Ltd.
    The benchmark BSE index rose 0.7 percent to a
record closing high of 24,858.59, surpassing its previous
milestone set on May 26.
    The broader NSE index gained 0.7 percent a record
closing high of 7,415.85, surpassing its previous record hit on
May 23.
    Steel shares gained after surveys showed China's factory and
services sectors had their best showings in months in May.
 
    Tata Steel rose 6.9 percent, Steel Authority of India
 gained 4.3 percent, and JSW Steel rose 4
percent. 
    Among other metal stocks, Sesa Sterlite surged 6.4
percent.
    Cement stocks also gained on value buying. ACC rose
2.5 percent and Ambuja Cement ended up 3.7 percent.
    Sugar refiners rose sharply on expectations that the new
government would push ethanol blending in petrol and increase
the import duty on the sweetener to support local prices,
several traders said. 
    Bajaj Hindusthan Ltd rose 10 percent, Dhampur
Sugar Mills Ltd advanced 10.8 percent, Shree Renuka
Sugars Ltd gained 10.7 percent, and Balrampur Chini
Mills Ltd ended up 7.8 percent
    Zee Entertainment Enterprises gained 2.3 percent
after the RBI on Monday said foreign institutional investors can
purchase up to 100 percent of stake in the company, up from the
earlier limit of 49 per cent. 
    However, bank shares ended mixed after the central bank kept
its key policy rate steady and toned down its inflation
rhetoric, while cutting the amount of bonds lenders must set
aside with the RBI. 
    HDFC Bank rose 0.5 percent, while Kotak Mahindra
Bank ended down 1.5 percent.
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro pinned to recent lows                             
* Brent slips towards $108 as weak refining demand bites  
* Europe stocks dip before inflation data           
* 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 

 (Additional reporting by Indulal PM; Editing by Subhranshu
Sahu)

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