Midsession: Sensex rises 2%; Reliance up 3%

Midsession: Sensex rises 2%; Reliance up 3%

Mumbai: Indian shares extended gains to 2% on Monday afternoon, led by gains in energy giant Reliance industries which was up over 3% on hopes of a patch-up between the Ambani brothers.

Higher European markets also underpinned positive investor sentiment, dealers said.

At 2:04pm, the 30-share BSE index was up 2.02% at 16,978.36 points, with 26 components advancing. The 50-share NSE Index was up 1.79% at 5,033.65.

Reliance Industries, which has the heaviest weighting in the index, was up 3.15% at Rs2,166.10.

“All stocks with the Reliance tag have gone up in a knee-jerk reaction on hopes that there can be a patch up between RIL and RNRL," said Deven Choksey, managing director and CEO of K.R. Choksey Shares.

“But I think it’s too late for that. It’s a corporate battle now, with too many people involved," he said.

Reliance Industries, controlled by elder brother Mukesh Ambani and which has the heaviest weight in the index, climbed 1.6% to Rs2,134, while Anil Ambani-led Reliance Natural Resources Ltd jumped 5.2% to Rs87.30.

Reliance Power, Reliance Communications, and Reliance Infrastructure, all controlled by Anil, were trading 1.8-3.2% higher.

The latest dispute has been over a deal for Reliance Industries to sell gas to Reliance Natural at below-market rates as agreed in a 2005 family settlement to divide the business following the death of the brothers’ father in 2002.

In a statement on Sunday, Anil said he wanted an end to the impasse. Reliance Industries said it welcomed the move, but added the dispute under litigation was not merely a family matter and that it hoped “any overtures for rapprochement are in no way related to the ongoing hearing of the case".

Traders said investors were awaiting August industrial output due by midday.

The median forecast in a Reuters poll showed the output may have risen 9.2% from a year earlier, picking up from a provisional 6.8% rise in July, on robust consumer demand and government expenditure.

The BSE index has risen over 74% so far this year, powered by foreign inflows of more than $12.8 billion and further gains would depend upon companies perform in the coming quarters, traders said.

In the broader market, gainers led losers in a ratio of 1.9:1 in a relatively low volume of 123 million shares.