* BSE index gains 1.27 pct, NSE index adds 1.18 pct
* Both indexes hit record high and record closing high
* Power, infrastructure and state-run cos gain
By Indulal PM
MUMBAI, July 2 Indian shares surged more than 1
percent to hit record highs on Wednesday after Finance Minister
Arun Jaitley's warning against "mindless populism" raised hopes
the government would unveil a fiscally prudent budget next week.
Jaitley on Tuesday also said a high fiscal deficit and
inflation are major challenges for India, further soothing
market sentiment ahead of the budget to be unveiled on July 10.
Among the top gainers were sectors expected to receive
support in the budget such as power and infrastructure,
including Larsen and Toubro and Bharat Heavy
Overseas investors who pumped in about $10 billion so far in
Indian shares this year, bought shares worth $142.8 million for
the third straight day on Tuesday, exchange and regulatory data
"It's a pre-budget rally and the government is giving enough
signals on how it is going to deal with the economy. Market is
taking cues from there and expectations are very high. Though we
are positive, we advise clients to be cautious and selective as
selling pressure can emerge on any negative news," said Suresh
Parmar, head, institutional equities, at KJMC Capital Markets.
The benchmark BSE index closed up 1.27 percent at
25,841.21 points. Earlier in the day, it surged 1.37 percent to
hit a record high of 25,864.53 points, surpassing its previous
life high of 25,735.87 hit on June 11.
The broader NSE index gained 1.18 percent to close
at 7,725.15 points, having hit a fresh record high of 7,732.40
points earlier in the session, breaching its previous peak of
7,700.05, also hit on June 11.
Shares in the power and infrastructure sectors, widely
expected to be among the biggest focus areas for the new
government, rallied. NTPC Ltd closed 3.33 percent
higher, Tata Power Co. Ltd ended up 0.9 percent and
Larsen and Toubro Ltd gained 1.6 percent.
The sub-index of state-run companies also gained
1.22 percent on hopes of reforms and divestment. Container Corp
of India gained 3.3 percent while Rural
Electrification Corp ended 3.8 percent higher.
Among blue-chips, Reliance Industries Ltd gained
1.02 percent and Sun Pharmaceutical Industries Ltd
ended 2.1 percent higher.
For additional stocks on the move double click
FACTORS TO WATCH
* Dollar steadies after hitting lows, awaits Yellen and ADP data
* Oil steadies above $112 on supply fears
* Asia shares score 3-year high on economic optimism
* 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:
U.S. company news European company news
Forex news Global Economy news
Technology news Telecoms news
Media news Banking news
Politics/General Asia Macro data
(Editing by Sunil Nair)