Indian shares edge higher on value-buying; blue chips gain

Mon May 5, 2014 6:59am EDT

* BSE index up 0.18 pct; NSE index gains 0.07 pct

* Recent underperformers gain on value-buying

* Metal stocks gain; Hindalco up 5.5 pct

By Indulal PM

MUMBAI, May 5 (Reuters) - Indian shares edged higher on Monday, recovering from a five-session losing streak as market heavyweights such as Reliance Industries recouped, although sentiment remained broadly weak ahead of the conclusion of elections later this month.

Global risk factors are also weighing on sentiment, with regional shares faltering on Monday after HSBC's final reading of China's April PMI contracted for a fourth consecutive month.

Although overseas investors have remained buyers of cash shares, they have turned sellers in index futures, totalling 2.43 billion rupees ($40.4 million) over the five previous sessions until Friday.

Analysts broadly expect shares to remain pressured, and off the record highs hit late last month, ahead of the outcome of elections on May 16.

"Nifty is struggling near 6,700 level for the last four trading sessions. With mixed cues directing the market, there is an indecision seen at higher levels," said Rakesh Goyal, senior vice president, Bonanza Portfolio Ltd.

"After a strong one-sided rally witnessed in the last few weeks, we expect some consolidation. Nifty is likely to trade within 6,500-6,850 in coming sessions," he said adding that volatility could increase ahead of the election results.

The benchmark BSE index closed 0.18 percent higher at 22,445.12, while the broader NSE index closed 0.07 percent up at 6,699.35.

Blue chips recovered on Monday after the NSE had fallen 1.3 percent last week, the worst weekly performance since the trading week ended on Jan. 31.

Reliance Industries Ltd gained 2.02 percent after the energy conglomerate fell 4.21 percent in the five sessions until Friday. Cigarette maker ITC Ltd advanced 1.31 percent after falling 3.7 percent during the five previous sessions.

Metal stocks advanced after a spike in copper prices, traders said. Hindalco Industries Ltd, which fell 8.6 percent in the five sessions until Friday, gained 5.5 percent while Tata Steel Ltd, which lost 8.4 percent in the same period, gained 1.9 percent.

Shares in Alstom T&D India Ltd ended 0.42 percent lower after General Electric Co on Monday offered to buy 25 percent in the Indian unit of Alstom SA's valued at up to $278 million.

However, the other unit of Alstom, Alstom India Ltd , gained 1.47 percent. Although GE also made an offer to the company, traders cited differing valuations.

GE will proceed with the offers for the Indian companies only if its bid for Alstom's energy arm goes through, the filings said.

Canara Bank Ltd gained 6.6 percent after the state-run lender's net non-performing loans fell to 1.98 percent during the January-March quarter from 2.39 percent in the previous quarter.

Among other laggards, Reliance Communications Ltd fell 3.97 percent after its consolidated net profit dropped more than expected in the January-March quarter.

Bharti Airtel fell 1.63 percent, declining for the fifth straight session after its earnings out on April 29 disappointed some investors.

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FACTORS TO WATCH * Yen hits 2-week high against dollar on soft China PMI * Brent edges higher towards $109 on Ukraine tensions * Shares stumble over China PMI, bonds in demand * Foreign institutional investor flows * For closing rates of Indian ADRs

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Politics/General Asia Macro data ($1 = 60.2100 Indian Rupees) (Reporting by Indulal PM; Editing by Anand Basu)