MUMBAI, June 14 (Reuters) – Indian shares rose to one-month
highs on Monday, tracking firm Asian markets, with Reliance
Industries Ltd (RELI.BO) leading the gains after the energy
conglomerate announced its re-entry into the telecom sector.
Banks were also trading higher as investors awaited May
inflation due around noon (0630 GMT). A Reuters poll has
forecast the wholesale price index INWPI=ECI probably rose
9.56 percent from the same month a year earlier.
By 10:23 a.m. (0453 GMT), the 30-share BSE index .BSESN
was trading up 0.96 percent at 17,229.07, with 24 of its
components gaining. In early trade, it had hit 17,254.55, which
was its highest since May 14.
Reliance Industries, which has the highest weight on the
Sensex, was up 1.5 percent at 1,061.50 rupees after rising as
much as 2.2 percent. [ID:nSGE65D051]
On Friday, billionaire Mukesh Ambani-controlled Reliance
Industries made a dramatic return to telecoms, agreeing to buy
Infotel Broadband the only company to win a nationwide licence
in India’s broadband wireless spectrum auction. [ID:nSGE65A071]
Separately, the Economic Times reported on Monday the
company would also foray into power sector. [ID:nSGE65D01H]
“Although RIL’s re-entry into the telecom provides some
clarity on utilisation of its future cash flows, in our view,
there are likely bigger opportunities in power, mining, E&P and
infrastructure,” Goldman Sachs said in a note.
It maintained a “neutral” rating on the stock.
Traders said the underlying investor sentiment was still
shaky because of lingering concerns about the euro zone debt
problems and their impact on foreign fund flows.
Foreign institutional investors (FIIs) are net buyers of
around $166 million of Indian equities so far this June,
helping the main index gain 1.7 percent in the period but
volume has been low.
In May, the funds had dumped $2 billion of stocks and the
index had dropped 3.5 percent.
“The gains in Asia are supporting the rise today,” said
Kunal Sukhani, manager of institutional equities at brokerage
Asian Markets Securities. “Though FIIs have been buying off and
on this month, it does not seem like money flow has returned as
State Bank of India (SBI.BO), the country’s No. 1 lender,
was up 0.6 percent while rivals ICICI Bank (ICBK.BO) and HDFC
Bank (HDBK.BO) rose 0.7 percent and 0.9 percent respectively.
In the broader market, gainers were more than twice the
number of losers on volume of 97 million shares.
The 50-share NSE index was up 0.8 percent at
STOCKS ON THE MOVE
* Dr Reddy’s Laboratories (REDY.BO) fell 3.7 percent to
1,409.95 rupees after a U.S. court restrained the drug maker
from distributing a generic version of allergy drug Allegra-D.
* SpiceJet (SPJT.BO) rose more than 6 percent after the
founder of Sun TV (SUTV.BO), Kalanithi Maran, and his aviation
firm Kal Airways Pvt Ltd agreed to buy a 37.7 percent stake in
the airline. [ID:nSGE65D04R]
The stock later trimmed gains to 0.2 percent at 56.15
* Engineers India (ENGI.BO) was up 1.6 percent at 320.70
rupees after the state-run engineering services firm said it
received approval from the federal Ministry of Petroleum &
Natural Gas for an offer for sale. [ID:nSGE65D03J]
* Oil explorer Cairn India (CAIL.BO) rose 1.2 percent to
304.70 rupees as crude oil prices rose to near $75 per barrel.
MAIN TOP 3 BY VOLUME
* SpiceJet on 6.1 million shares
* Pantaloon Retail (PART.BO) on 1.8 million shares
* IFCI (IFCI.BO) on 1.6 million shares
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
* Indian bond report
* Short-covering lifts euro, Aussie breaches barrier
* Oil up toward $75 on economic recovery optimism, weaker
* Asia stocks at 1-mth high; euro bounces
* Wall St climbs in late advance on chip makers
* For closing rates of Indian ADRs