In­dian shares hit record high; state-run lenders gain

The Financial Daily - - INTERNATIONAL -

MUM­BAI: In­dian shares hit a record high on Fri­day, rising for the third straight ses­sion, led by gains in lenders such as State Bank of In­dia af­ter the govern­ment said it would cut its stake in state-run banks.

The In­dian govern­ment plans to raise about 891.2 bil­lion ru­pees ($14.4 bil­lion) by re­duc­ing its stakes in state-run banks to 52 per­cent, the ju­nior fi­nance min­is­ter said on Fri­day, send­ing shares of state-run lenders higher.

Over­all sen­ti­ment was bullish ahead of the eco­nomic growth data later in the day and the cen­tral bank's pol­icy re­view due on Dec. 2.

Over­seas in­vestors bought In­dian shares worth $424.21 mil­lion in the last five straight ses­sions, putting their to­tal in­vest­ment so far this year at $15.81 bil­lion.

"Sen­ti­ments were buoyed by OPEC's de­ci­sion to sus­tain their pro­duc­tion levels and the sub­se­quent sharp fall in crude prices.

The risk ap­petite came back and mar­kets are hop­ing for a rate cut in the RBI pol­icy meet­ing next week," said Dipen Shah, head of pri­vate client group re­search at Ko­tak Se­cu­ri­ties.

"Go­ing ahead, apart from the RBI meet­ing, fis­cal re­forms from the govern­ment will be needed for the mar­kets to move higher on a sus­tain­able ba­sis," he added.

The bench­mark BSE in­dex closed 0.9 per­cent higher at 28,693.99 points.

Ear­lier in the day, it was up as much as 1.35 per­cent to a record high of 28,822.37, sur­pass­ing the pre­vi­ous high of 28,541.96 posted on Nov. 24.

The in­dex gained 1.3 per­cent in the week, and 2.97 per­cent in the month.

The broader NSE in­dex closed 1.11 per­cent higher at 8,588.25 points, af­ter hit­ting a record high of 8,617 points ear­lier in the day.

The in­dex gained 1.3 per­cent in the week and 3.2 per­cent in Novem­ber.

State-run banks led the gains with the bank­ing in­dex of the NSE clos­ing up 2.7 per­cent and the in­dex for state-run banks up 5.7 per­cent af­ter the govern­ment's plans to sell stake in state-run lenders.

State Bank of In­dia closed 5.1 per­cent higher, at its high­est level since Novem­ber 2010. Bank of Bar­oda closed up 7.1 per­cent and Pun­jab Na­tional Bank gained 7.4 per­cent.

In­ter­est rate-sen­si­tives such as auto com­pa­nies also gained ahead of the RBI pol­icy. Mahin­dra and Mahin­dra closed 2.4 per­cent higher while Tata Mo­tors ended up 2.6 per­cent.

State-run oil mar­ket­ing com­pa­nies and air­line stocks ral­lied af­ter in­ter­na­tional crude prices hit a multi-year low. In­dian Oil Corp ended up 4.6 per­cent while Hin­dus­tan Pe­tro­leum Corp Ltd gained 8.95 per­cent. Among air­line stocks, Jet Air­ways surged 20 per­cent while SpiceJet ended 18.4 per­cent higher.

Shares in Just Dial Ltd gained 2.2 per­cent af­ter the Re­serve Bank of In­dia al­lowed for­eign in­sti­tu­tional in­vestors to buy up to 75 per­cent in the com­pany.

Among the losers, Hin­dus­tan Unilever ended 0.5 per­cent lower on profit-tak­ing.

The stock had gained 2.6 per­cent in the pre­vi­ous ses­sion. - Agen­cies

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