MUMBAI, Nov 28 (Reuters): 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 per cent, 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 per cent higher at 28,693.99 points. Earlier in the day, it was up as much as 1.35 per cent 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 per cent in the week, and 2.97 per cent in the month.
The broader NSE index closed 1.11 per cent higher at 8,588.25 points, after hitting a record high of 8,617 points earlier in the day. The index gained 1.3 per cent in the week and 3.2 per cent in November.
State-run banks led the gains with the banking index of the NSE closing up 2.7 per cent and the index for state-run banks up 5.7 per cent after the government's plans to sell stake in state-run lenders.
State Bank of India closed 5.1 per cent higher, at its highest level since November 2010. Bank of Baroda closed up 7.1 per cent and Punjab National Bank gained 7.4 per cent.
Interest rate-sensitives such as auto companies also gained ahead of the RBI policy. Mahindra and Mahindra closed 2.4 per cent higher while Tata Motors ended up 2.6 per cent.
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 per cent while Hindustan Petroleum Corp Ltd gained 8.95 per cent.
Among airline stocks, Jet Airways surged 20 per cent while SpiceJet ended 18.4 per cent higher.
Shares in Just Dial Ltd gained 2.2 per cent after the Reserve Bank of India allowed foreign institutional investors to buy up to 75 per cent in the company.
The Indian government plans to raise about 891.2 billion rupees ($14.4 billion) by reducing its stakes in state-run banks to 52 per cent, 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 per cent higher at 28,693.99 points. Earlier in the day, it was up as much as 1.35 per cent 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 per cent in the week, and 2.97 per cent in the month.
The broader NSE index closed 1.11 per cent higher at 8,588.25 points, after hitting a record high of 8,617 points earlier in the day. The index gained 1.3 per cent in the week and 3.2 per cent in November.
State-run banks led the gains with the banking index of the NSE closing up 2.7 per cent and the index for state-run banks up 5.7 per cent after the government's plans to sell stake in state-run lenders.
State Bank of India closed 5.1 per cent higher, at its highest level since November 2010. Bank of Baroda closed up 7.1 per cent and Punjab National Bank gained 7.4 per cent.
Interest rate-sensitives such as auto companies also gained ahead of the RBI policy. Mahindra and Mahindra closed 2.4 per cent higher while Tata Motors ended up 2.6 per cent.
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 per cent while Hindustan Petroleum Corp Ltd gained 8.95 per cent.
Among airline stocks, Jet Airways surged 20 per cent while SpiceJet ended 18.4 per cent higher.
Shares in Just Dial Ltd gained 2.2 per cent after the Reserve Bank of India allowed foreign institutional investors to buy up to 75 per cent in the company.
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