Markets close up 1.3% led by Reliance gains

Markets close up 1.3% led by Reliance gains

Mumbai: Indian shares rose for a third straight session on Wednesday to its highest close in six weeks helped by a rally in Reliance Industries as LyondellBasell was said to have rejected the energy major’s revised $14.5 billion offer.

Reliance Industries, which has the highest weight on the main index, climbed 3.9%, its biggest percentage-point gain in 2010, to Rs1,021.95.

“Reliance could have been dragged into a bidding war and eventually the valuation for LyondellBasell could have been stretched," said Prayesh Jain, a research analyst with India Infoline.

“The stock is just reacting on relief that it is not overpaying," added Jain.

LyondellBasell has rejected an offer from Reliance that values the bankrupt petrochemicals group at $14.5 billion, a person familiar with the matter said on Tuesday.

The 30-share BSE index closed 1.36% or 227.45 points higher at 17,001.01. The 50-share NSE index climbed 1.4% to 5,088.10.

Twenty-four of its components closed in the green.

The benchmark has gained 4.6% since 25 February, supported by last Friday’s federal budget which pushed for higher consumption and fiscal consolidation.

“People were sitting on cash before the budget and that seems to be coming in the market now," said Vaibhav Sanghavi, director of Ambit Capital.

But, if global cues turned negative, the markets could correct after the recent momentum, he added.

Financials gained on good prospects in an expanding economy.

Top lender State Bank of India firmed 1.6%, while private lenders ICICI Bank and HDFC Bank rose 1.2% and 1.8% respectively.

Engineering and construction firm Jaiprakash Associates jumped 6.1% as its cement shipments in February jumped 61%, while ACC fell 0.2% as its cement shipments dropped 2.3%.

Tata Consultancy Services rose 0.5% after the leading outsourcer said late on Tuesday it had won a bid to administer Britain’s new national pension scheme.

Tata Motors raced 1.3% after the top vehicle maker said it would bring an electric version of the Nano, the world’s cheapest car, to Europe within three years, starting with Britain and Scandinavia.

In the broader market, gainers were more than double the number of losers with 361 million shares changing hands on the Bombay Stock Exchange, higher than its last week’s daily average of 291 million.