* BSE index gains 1.93 pct; NSE index ends up 1.83 pct
* State-run banks rally on hopes of govt stake sale
* Market awaits central bank policy review on Tuesday
By Indulal PM
MUMBAI, June 2 Indian shares posted their
biggest daily gains in three weeks on Monday as Larsen & Toubro
surged after its quarterly earnings beat estimates while
state-run banks rallied on hopes the government would consider
selling some of its holdings and inject capital.
The gains snapped a two-day selling streak, and came in part
after foreign investors purchased shares worth a net 29.77
billion rupees ($503.8 million) on Friday, which included about
$364 million from the Canada Pension Plan Investment Board for
increasing its stake in Kotak Mahindra Bank.
The net purchases came after foreign investors sold in five
of the six sessions until Thursday.
Investors showed little reaction after data late on Friday
showed India's economy posted a second straight year of sub-5
percent growth, while a business survey on Monday showed factory
activity missed expectations although input prices rose at their
slowest rate in over a year.
Markets are instead awaiting the Reserve Bank of India's
policy review on Tuesday, with most analysts expecting the
central bank to keep interest rates on hold but to ease up a bit
on its tough inflation rhetoric in a conciliatory gesture to the
new Narendra Modi government.
"Tomorrow will be the first policy under the Modi
government, and we are not expecting any negative surprises.
It's a buy-on-dips market and the undercurrent is firm," said
Suresh Parmar, head, institutional equities at KJMC Capital
"FIIs continue to buy and we don't see any immediate
downward risk. There could be some minor profit-booking, which
would be absorbed."
The benchmark BSE index rose 1.93 percent to end at
24,684.85, posting its biggest daily percentage gain since May
The broader NSE index ended 1.83 percent higher at
Lenders were among the leading gainers, with the NSE bank
sub-index gaining 3.3 percent on hopes the government
would take measures to privatise some its holdings in public
Domestic newswire Cogencis reported on Monday the government
was "seriously working" on a plan to transfer its equity in
public sector banks to a holding company, citing an unnamed
State Bank of India surged 4.03 percent, Punjab
National Bank gained 3.65 percent, and Bank of India
rose 4.7 percent.
Shares of Larsen & Toubro surged 6.5 percent after
its January-March net profit rose a bigger-than-expected 69
percent, helped by a steep gain in revenue from its
infrastructure and heavy engineering businesses, and gains from
NMDC Ltd closed 3.6 percent higher after the miner
said on Friday its January-March profit rose by 34 percent to
19.62 billion rupees ($332 million).
Shares of Cox and Kings Ltd surged as much as 13
percent to their highest since March 2012 after the company sold
the camping division of subsidiary Holidaybreak Ltd to France's
Homair Vacances group for 89.2 million pounds.
HDFC Bank ended 3.4 percent higher, while
Hindustan Unilever closed 0.4 percent lower as changes
by MSCI to its global indices became effective after the close
of markets on Friday.
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FACTORS TO WATCH
* Euro pressured by expectations of ECB easing, eyes recent lows
* Brent climbs towards $110, China data revives demand hopes
* China PMI lifts shares, commodities, euro soft ahead of
* Foreign institutional investor flows
* For closing rates of Indian ADRs
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia........ Japan....... S.Korea...
S.E. Asia....... Hong Kong... Taiwan....
Australia/NZ.... India....... China.....
Wall Street .... Gold ....... Currency..
Eurostocks..... Oil ........ JP bonds...
ADR Report ..... LME metals. US bonds..
Stocks News US.. Stocks News Europe
DIARIES & DATA:
Indian Data Watch Asia earnings diary
U.S. earnings diary European diary
Indian diary Wall Street Week Ahead
Eurostocks Week Ahead
For top Asian company news, double click on:
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Forex news Global Economy news
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(Reporting by Indulal PM; Editing by Subhranshu Sahu)