Indian shares climb to record closing highs; BSE index above 26,000

Mon Jul 7, 2014 6:54am EDT

Related Topics

* BSE index gains 0.53 pct; NSE index ends up 0.46 pct

* Indexes hit record highs; NSE hits life high for third straight session

* Tech stocks gain ahead of earnings; Infosys up 3 pct

By Indulal PM

MUMBAI, July 7 (Reuters) - India's NSE index rose on Monday to a third consecutive record high, while the benchmark BSE index surpassed 26,000 points, riding on gains in technology stocks ahead of Infosys Ltd's results and hopes of a fiscally prudent budget.

Foreign investors continued to support shares, buying a net 9.43 billion rupees ($157 million) on Friday, a sixth straight session of purchases. Overseas investors have bought $10.54 billion worth of Indian shares so far this year, regulatory and exchange data showed.

Investors are hoping that Prime Minister Narendra Modi and Finance Minister Arun Jaitley will deliver a fiscally prudent budget that increases revenue from asset sales while controlling spending.

Still, some caution was also reflected as investors picked up defensive shares such as Sun Pharmaceutical Industries Ltd .

"There is portfolio adjustment and people are taking positions ahead of the budget. Investors are looking at sectors, where greater emphasis would be given by the Modi government. We are bullish and expect more upside, but advise clients to be cautious and selective," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

The benchmark BSE index ended 0.53 percent higher at 26,100.08, a record closing high. Earlier in the day, it rose 0.62 percent to an all-time high of 26,123.55.

The broader NSE index ended 0.46 percent higher at 7,787.15 after rising as much as 0.52 percent to hit a record high of 7,792, the third session in a row.

Technology stocks led the gains, with the IT index of the BSE closing 2.63 percent higher ahead of Infosys kicking of the April-June earnings season on July 11. Infosys rose 3.07 percent, while Tata Consultancy Services Ltd gained 3.24 percent.

Infrastructure finance company IDFC Ltd rose 6.34 percent after Morgan Stanley upgraded the stock to "overweight" from "underweight" and raised its target price to 175 rupees from 115 rupees.

Healthcare stocks gained as investors tried to de-risk their portfolios by adding defensive stocks. Dr Reddy's Laboratories Ltd rose 1.94 percent, while Sun Pharmaceutical ended 1.93 percent higher.

Among other blue-chips, energy stocks gained with Tata Power Co Ltd up 3.7 percent and Bharat Heavy Electricals Ltd ending 0.74 percent higher on hopes that the power sector would get better treatment in the budget.

However, gains were limited as investors trimmed positions in banking, and oil and gas stocks. ICICI Bank closed 0.8 percent lower, while Oil and Natural Gas Corp ended down 1.5 percent.

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FACTORS TO WATCH * Euro struggles after German data, nears 2-year low vs sterling * Oil slips towards $110 as supply fears fade * Dollar creeps higher as equities prepare for earnings * Foreign institutional investor flows * For closing rates of Indian ADRs

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Politics/General Asia Macro data ($1 = 60.0200 Indian Rupees) (Reporting by Indulal PM; Editing by Prateek Chatterjee)

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