Sensex Rallies To One-Month High; FIIs Turn Buyers
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The BSE Sensex rose for a third consecutive session on Monday to close at its highest in nearly one month, drawing comfort after foreign investors bought shares in the previous session, ending a 13-day selling streak. The Sensex rose 0.94 per cent, or 181.58 points, to end at 19,577.39, marking its highest close since 3 June.
The Nifty rose 0.97 per cent, or 56.65 points, to end at 5,898.85, gaining for a third day. Gains were also helped as Reliance Industries rose 2.7 per cent, extending recent gains after the government recently approved a hike in gas prices. Among other blue-chips, Larsen and Toubro gained 3.1 per cent while State Bank of India rose 3.2 per cent.
Foreign institutional investors bought shares worth Rs 1,124 crore on Friday, snapping 13 days of sales, while they also bought Rs 1,691 crore worth of index futures, data from the National Stock Exchange showed, raising hopes this week's rally would continue. However, analysts expressed doubts about whether the gains could sustain after volumes on Nifty on Monday fell to their lowest since 19 June.
Shares could find support, should the government unveil reform measures, with expectations of potential action to open up more sectors for foreign investment.
"Out of compulsion, government would have to do a series of reforms for the economy to pick up in near term," said G. Chokkalingam, executive director and chief investment officer, at Centrum Wealth Management.
United Spirits gained 13.4 per cent after Morgan Stanley Asia (Singapore) Pte increased its stake in the company to 4.76 per cent from 4.02 per cent. Reliance
Communications rose nearly 12 per cent to their highest level in 2-1/2 years after the mobile carrier said it had repaid foreign currency loans worth a total $1.2
However, among decliners, Infosys fell 1.9 per cent after Morgan Stanley said the company may cut its fiscal 2013/14 revenue outlook to 4-6 per cent growth, from
the 6-10 per cent growth it forecast in April.