Nifty surges past 8,000 to record high

By Abhishek Vishnoi

MUMBAI (Reuters) - The Nifty surged past the psychologically important 8,000 level for the first time on Monday as blue-chips such as ICICI Bank gained after better-than-expected quarterly economic growth data.

Data showing India's economy grew a faster-than-expected 5.7 percent in the April-June quarter has reinforced hopes that Prime Minister Narendra Modi's election victory nearly four months ago will help spark a recovery in investments and confidence.

Resources firms rallied late in the session after the Attorney General proposed to the Supreme Court that about 40 of the 218 coal mines it declared illegal should not be taken back from the companies that operate them as they were either producing or were close to producing

 

The court is due to rule later in the day about whether to cancel the allocations of coal blocks it ruled as illegal last week, which could create uncertainty in a sector that generates the bulk of the country's electricity.

"We seem to be in the initial stages of a bull phase. Reasonable valuations relative to other emerging markets, coupled with healthy growth prospects for the economy, lead us to believe that we should move to a bull phase over the next few years," said Motilal Oswal, chairman of Motilal Oswal Financial Services Ltd.

The 50-share Nifty rose as much as 1.01 percent to a record high of 8,035, surpassing its previous all-time high hit on Aug. 25. It ended up 0.92 percent.

The BSE Sensex rose as much as 1 percent to its second consecutive record high at 26,900.30.

Foreign investors, key drivers of the market rally this year, have bought shares worth $13 billion in 2014 so far despite some geopolitical tensions, on continued optimism about an improving economy and expectations Modi will usher in significant reforms.

Blue-chip stocks led the gainers. ICICI Bank gained 2.7 percent, while Larsen & Toubro rose 3.3 percent.

Axis Bank gained 2.1 percent, while Oil and Natural Gas Corporation rose 1.1 percent.

Maruti Suzuki India ended 4.6 percent higher after marking a record high of 2,930 rupees, after vehicle sales rose 26.9 percent in August from a year earlier, beating some expectations.

Reliance Industries rose 1.5 percent after Reuters reported that the company plans to invest about $13 billion in energy projects, including a 400,000-barrel-per-day (bpd) crude refinery at its Jamnagar complex.

Meanwhile, metal stocks rose on hopes that the Supreme Court would not cancel the allocations of coal blocks in its ruling later in the day.

Jindal Steel and Power surged 6.4 percent, while Hindalco Industries jumped 3.6 percent.

Mid-cap state-run banks gained on short-covering after better-than-expected GDP data and Reserve Bank of India Governor Raghuram Rajan's comments noting bad loan are not "scary" as key reasons.

Canara Bank rose 3.8 percent, Syndicate Bank ended up 3.6 percent, Andhra Bank advanced 7.1 percent, and Allahabad Bank closed 3.8 percent higher.

Bharti Airtel rose 1.6 percent after it said a unit signed an agreement to acquire more than 2.7 million subscribers of yuMobile.

However, among stocks that fell, IRB Infrastructure Developers Ltd lost 1.3 percent after Citigroup downgraded the stock to "sell" from "buy", citing valuation, moderate return ratios and high leverage."

(Editing by Subhranshu Sahu)