July 1, 2014 / 12:26 PM / 4 years ago

UPDATE 1-India's NSE index marks highest close in nearly three weeks

* Benchmark BSE index up 0.4 pct; NSE index adds 0.31 pct

* Maruti Suzuki up nearly 6 pct to record high

* Investors seen building positions ahead of budget-analyst (Adds milestones)

By Indulal PM

MUMBAI, July 1 (Reuters) - India’s NSE index rose on Tuesday to mark its highest close in nearly three weeks, approaching a record high hit last month, as auto makers such as Maruti Suzuki India surged after stronger monthly sales, while overseas buying also helped.

Foreign institutional investors bought shares worth $214.42 million on Monday, their biggest single-day purchase since June 12, according to provisional exchange data. Overseas funds have pumped in $9.9 billion so far this year, spurring a rally that took the NSE index to a record high last month.

A firm trend from regional markets on upbeat manufacturing data from China also helped. In India, the HSBC Manufacturing Purchasing Managers’ Index, compiled by Markit, advanced to 51.5 in June from 51.4 in May, expanding at the fastest pace in four months.

Investors were also seen churning portfolio and buying into stocks such as infrastructure and capital goods, where the newly elected government is likely to give more emphasis in its maiden budget on July 10, traders said.

“Market is aligning itself for the budget, which will be the next big event. We can see sector rotation. Budget is going to be focused on infrastructure, strengthening of banks and bringing out reforms in agriculture for larger growth. And those stocks related to these sectors will be in the limelight for the short-term,” said Deven Choksey, managing director, KR Choksey Securities.

The broader NSE index ended 0.31 percent higher at 7,634.70 points, within touch of a peak of 7,700.05 hit on June 11, marking its highest close since June 12.

The benchmark BSE index gained 0.4 percent to 25,516.35 points, not far from the record high of 25,735.87 hit on June 11, marking its highest closing since June 17.

Shares in Maruti gained 5.9 percent to a record high with the biggest single-day gain since March 18 after it reported a 33.5 percent in monthly vehicle sales, which beat some analysts’ expectations.

Mahindra and Mahindra Ltd gained 4.11 percent and Tata Motors Ltd ended 4.52 percent higher.

Among other gainers, shares in Hindalco Industries Ltd rose 6.73 percent after CLSA upgraded the stock to “buy” from “sell” and raised its target price to 215 rupees from 110 rupees.

Shares in other metal companies have also surged with the BSE’s metal index gaining 2.03 percent after London copper hit its highest in nearly four months on Tuesday. . Tata Steel Ltd gained 2.32 percent while JSW Steel Ltd rose 2.64 percent.

Among capital goods stocks, Larsen and Toubro Ltd closed 1.45 percent higher while BHarat Heavy Electricals Ltd ended up 0.86 percent.

However, gains were limited as technology stocks fell on profit-taking. Tata Consultancy Services ended 1.43 percent lower after gaining 12.84 percent in the previous month.

Wipro Ltd ended down 1.5 percent after it gained 7.9 percent in June.

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FACTORS TO WATCH * Euro back around $1.37 as ECB meets again * Brent holds above $112 as China data draws focus back to demand * European stocks get second half off to steady start * 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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Politics/General Asia Macro data (Additional reporting by Abhishek Vishnoi; Editing by Sunil Nair)

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