Indian shares extended last week's strong rally on Monday after the government relaxed foreign direct investment (FDI) norms in aviation, multi-brand retail, power exchanges and broadcast services to jump-start flagging growth. The reform measures coming on the back of hike in diesel prices lifted Indian rupee to a four-month high. Asian stocks are turning in a mixed performance, limiting gains to some extent.
Trading off its day's high, the benchmark BSE Sensex is currently up 125 points or 0.68 percent at 18,589, while the broader Nifty index is at 5,617, up 39 points or 0.7 percent from its previous close.
Rate-sensitive realty and banking stocks are leading the gainers ahead of RBI policy review meet. Many economists expect the central bank to leave policy rates unchanged, citing inflation concerns.
Among the prominent gainers, Jindal Steel, ICICI Bank, Maruti Suzuki, Reliance Industries, SBI and Sterlite, Tata Motors and Larsen & Toubro are rallying 3-4 percent.
Shares of organized retailers such as Trent, Shoppers Stop and Pantaloon India are climbing 6-17 percent after the government allowed 51 percent FDI in the multi-brand retail sector subject to specified conditions.
Aviation stocks are also rallying after the Cabinet Committee on Economic Affairs cleared a proposal to allow foreign airlines pick up to 49 percent stakes in Indian carriers. Kingfisher is locked at the 20 percent upper circuit limit, while Jet Airways is gaining 2 percent and SpiceJet is moving up 11.6 percent.
Oil India is up 0.3 percent, while Hindustan Copper, MMTC and National Aluminum are up 1-3 percent after the government finally unveiled its disinvestment program for the current fiscal.
Shares of Bharat Heavy Electricals are rallying 2.6 percent after the state-owned company said the row over coal block allocations would not impact its operations. Welspun Corp. is adding a percent as it successfully concluded a Rs. 252.8-crore non-convertible debenture issue.
Telecom firms are gaining ground even as industry data showed leading GSM operators lost a total of over 7.10 million subscribers last month. Bharti Airtel is gaining 1.7 percent and Idea Cellular is up over 2 percent.
ITC is losing 2.6 percent after the diversified business conglomerate said it has lined up investments of Rs. 25,000 crore over the next five years to expand its hotel business. Bhushan Steel and Strips is declining 1.6 percent after the Inter Ministerial Group on coal blocks on Saturday recommended de-allocation of the New Patrapara coal block allotted to the company and others in 2006.
Benchmark indexes Sensex and the broader Nifty rose over 4 percent each to multi-month highs last week, with markets posting gains in all five trading sessions, after the government hiked the price of diesel and limited the number of subsidized LPG cylinders that a household can avail of in a year.
A favorable ruling by the German Constitutional Court on the Eurozone bailout fund and the Federal Reserve's decision to buy $40 billion of mortgage securities a month until the US economy improves also lifted investor appetite for riskier assets.
by RTT Staff Writer
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