Sensex gains nearly 2 pct; earnings, macro data key

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose about 2 percent on Thursday to its highest in about 1-1/2 months as blue chips such as HDFC Bank staged a broad recovery from recent falls on hopes that U.S. monetary stimulus would not end as early as feared.

Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. central bank would continue to pursue an accommodative monetary policy as inflation remained low and the unemployment rate might be understating the weakness of the labour market.

That helped ease concerns about foreign selling that have hit Indian markets. Overseas investors have sold a net 100.8 billion rupees of shares since the start of June.

 

Still, some caution also prevailed ahead of Infosys Ltd earnings due on Friday, which will kick off the blue chip reporting season, and data on industrial production and consumer prices also due on Friday.

"While global cues put Indian markets in action today, the domestic events will give the climax tomorrow," said Milan Bavishi, head of research at Inventure Growth and Securities.

The benchmark BSE index gained 1.98 percent or 381.94 points, to end at 19,676.06, marking its highest close since May 31.

The NSE stock index rose 2.04 percent or 118.40 points to end at 5,935.10, marking its highest close since June 3.

Both indexes posted their biggest daily percentage gains since June 28.

Blue chips led the market, with ITC Ltd gaining 2.3 percent while HDFC Bank Ltd ending up 3.6 percent.

Infosys gained 1.1 percent a day ahead of its April-June earnings.

Shares in Mangalore Chemicals & Fertilizers Ltd (MCF) surged 10 percent to a record high, hitting their maximum daily limit for a second consecutive session, on expectations the company is becoming a target for a takeover.

Shares in Apollo Tyres Ltd gained 1.5 percent, hitting their highest intraday level since June 18, after Morgan Stanley Asia (Singapore) Pte on Wednesday bought a 0.5 percent stake in the company via a bulk deal, NSE data shows.

However among stocks that fell, State Trading Corp of India Ltd lost 5 percent after a government minister said India's cabinet approved planned stake sale in the company.

Maruti Suzuki India Ltd fell 2.5 percent after Macquarie downgraded the stock to "neutral" from "outperform" and cut its target price to 1,525 rupees from 1,850, citing continued weakness in passenger vehicle demand and discounts on models.

(Editing by Anand Basu)