January 21, 2013 / 11:36 AM / 5 years ago

Indian shares hit 2-yr high; Reliance, ITC lead

* BSE index gains 0.31 pct; NSE ends 0.3 pct higher
    * Reliance gains on strong earnings
    * Jet Airways gains on SpiceJet results

    By Manoj Dharra
    MUMBAI, Jan 21 (Reuters) - Indian shares gained for a third
consecutive session on Monday to two-year highs on rising
optimism about corporate profits after Reliance Industries and
ITC became the latest blue chips to post better-than-expected
    Indian conglomerate Reliance Industries Ltd posted
its first profit increase after four quarters of declining
returns, buoyed by improving margins in its core oil refining
business, sending its shares to near 19-month high.
    Earnings will continue to set the tone in Indian markets,
with Larsen & Toubro Ltd, Maruti Suzuki India Ltd
 and Hindustan Unilever Ltd among blue chip
companies set to post October-December results.
    The solid results have come after Indian markets posted
decent gains this month, buoyed by expectations of interest rate
cuts from the central bank. The government's fiscal
consolidation measures, including raising diesel prices last
week, have also supported shares, sparking continued foreign
investor buying. 
    "Signs are encouraging so far for earnings season, but a lot
of infrastructure and PSU stock are yet to announce," said Sonam
Udasi, head of research at IDBI Capital.
    "RBI policy can kick start sentiment in a way but more
importantly it will be how policy makers will be able to manage
in budget and deficit targets," Udasi added. 
     The benchmark BSE index rose 0.31 percent, or
62.78 points, to end at 20,101.82, its highest close since Jan.
6, 2011.
     The broader NSE index rose 0.3 percent, or 17.90
points, to end at 6,082.30, its highest close since Jan. 4,
    January futures contract on India's 50-stock index 
breached 6,100 points earlier in the day, marking the first time
a near-month index futures contract rose over that level since
Jan. 6, 2011. The contract ended at 6,097.90 points.
    Reliance Industries Ltd, the most valuable stock
in India, rose 2.2 percent to 919.95 rupees. 
    Among other companies that reported earnings recently, ITC
gained 1.43 percent after it beat estimates on Friday with a 21
percent rise in quarterly profit as cigarette volumes improved
after four quarters of stagnant growth. 
    Shares in Reliance Communications Ltd gained 6.84
percent, its biggest gain since Nov. 26, 2012, after CLSA said
several catalysts could help the company unlock value, including
an "inevitable" tower/infrastructure-sharing deal with Reliance
Industries for its 4G rollout. 
    Indian budget carrier SpiceJet rose 5 percent
after swinging to a quarterly profit on Monday, aided by higher
    The improved earnings also boosted rival Jet Airways
, which gained 5.34 percent.
    "SpiceJet's result offers a very positive read-through for
Jet's 3Q results," IIFL said in a note.
    Shares in India's Hindustan Unilever rose 1.4
percent, ahead of October-December results due on Tuesday, after
earlier dipping below its 200-day moving average for the first
time since May 5, 2011.    
    Among shares that fell were Housing Development Finance Corp
(HDFC), which dropped 1.2 percent after missing
estimates on Monday. 
    Shares in Mahindra & Mahindra fell 0.44 percent
after the Business Standard newspaper reported that the
government might impose a higher excise duty, or a surcharge, on
diesel sports utility vehicles, citing an unnamed finance
ministry official. 
     For additional stocks on the move double click 
    FACTORS TO WATCH                                            
* Yen rises on profit taking before BOJ decision          
* Oil loses ground below $112 on oversupply worries        
* European shares test 2-yr highs, before BOJ        
* 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..... 
   OTHER MARKETS:                                               
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                                   
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   For top Asian company news, double click on:       
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 (Additional reprting by Abhishek Vishnoi; Editing by Jijo
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