Sensex rises nearly 2 percent; energy firms rally

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose nearly 2 percent on Thursday to its highest in more than a week as energy firms such as Reliance Industries gained on expectations that the government would increase domestic prices of gas.

Broader sentiment was supported by data showing the current account deficit for the fiscal year ended in March was a lower-than-expected 4.8 percent of gross domestic product.

Although the current account data on its own is unlikely to spark a rally in the near term, analysts said the number helped ease some of the concerns after the Indian currency had touched a record low of 60.76 to the dollar.

 

Trading was volatile due to the expiry of derivatives at the end of the session. Starting on Friday, the focus is likely to return to foreign investors, who have net sold 111.33 billion rupees over the previous 13 sessions.

"FII figures for the next 2-3 days would be important for deciding the near-term trend," said Vivek Mahajan, head of research at Aditya Birla Money.

The rupee, which hit a record low, is also to be watched, he added.

The benchmark BSE index rose 1.75 percent, or 323.83 points, to end at 18,875.95, marking its highest close since June 19.

The broader NSE index rose 1.68 percent, or 93.65 points, to end at 5,682.35, posting its biggest daily percentage gain since June 14.

Shares in energy firms gained on media reports that a government committee is meeting later in the day to contemplate a hike in natural gas prices, dealers said.

Reliance Industries Ltd ended 3.3 percent higher, Oil India Ltd rose 1.9 percent and Oil and Natural Gas Corp Ltd gained 3.8 percent.

Software exporters gained on expectations that the weaker rupee would boost their earnings, dealers said. The rupee hit a record low of 60.76 to a dollar on Wednesday.

Tata Consultancy Services Ltd rose 3.8 percent and Infosys Ltd gained 3.5 percent.

Among other blue chips, Sun Pharmaceutical Industries Ltd gained 3.5 percent, while HDFC Bank Ltd rose 3.8 percent on value buying after recent declines.

Shares in South Indian Bank Ltd gained 2.9 percent

after the central bank on Wednesday withdrew restrictions placed on the purchase of its shares by foreign investors.

Among stocks that fell, jeweller Gitanjali Gems Ltd lost 9.99 percent, hitting its daily lower limit for a fourth consecutive day, on fears the government will further stall the supply of gold.

The four-day fall has wiped out 22.21 billion rupees, more than half of Gitanjali's market capitalisation.

The Indian government is looking to curb gold imports to improve the current account deficit that hit a record high in the October-December quarter.

(Editing by Prateek Chatterjee)