BSE Sensex gains for second day; ITC, HUL rise

The Sensex rose on Friday to mark its second weekly gain as ITC rose after raising the price for one of its cigarette brands, while Hindustan Unilever (HUL) advanced to a record high after parent company Unilever increased its stake in the Indian unit.

Sentiment was also helped as the indexes closed above their 200-day moving averages for a second day and after foreign investors bought shares worth Rs 160 crore and equity derivatives worth Rs 1,500 crore on Thursday. Foreign trading has become a key barometer for markets after overseas funds sold Rs 11,026 crore worth of shares in June as part of a sell-off in emerging markets and a slump in the rupee to record lows.

Investors were eyeing monthly US employment data, due later in the day, while gearing up for a new earnings season that begins next week when Infosys unveils its June-quarter results on June 12.

"Market opened gap up on global cues as well as short covering as Nifty was above 200-day moving averages (DMA). The important trigger is Infosys results; before that the market will remain lacklustre," said Kishor P Ostwal, chairman and managing director at CNI Research.

The benchmark BSE index rose 0.4 per cent, or 84.98 points, to end at 19,495.82, rising for a second consecutive week with a gain of 0.5 per cent. The broader NSE index rose 0.5 per cent, or 30.95 points, to end at 5,867.90, also gaining 0.4 per cent for the week.

ITC rose 1.1 per cent, a second day of gains, after the company said on Thursday it had raised the price of its Gold Flake Regular Filter cigarettes.

Reliance Industries gained 2.2 per cent on hopes that recent hefty increase in gas prices would improve its earnings in the medium term.

Hindustan Unilever ended 1.3 per cent higher, having earlier hit a record Rs 632, after Unilever said it had acquired a little over two-thirds of the Indian unit, less than the total amount it had offered to buy in the voluntary tender offer.

Hopes about Hindustan Unilever's outlook and that Unilever may eventually look to again acquire shares in the Indian unit spurred the gains, analysts said.

Shares in sugar companies rose after the government decided to raise import duty on the sweetener to 15 per cent from 10 to discourage overseas buying, as ample supplies have sparked a drop in local prices.

Bajaj Hindusthan gained 1.7 per cent, while Shree Renuka Sugars rose 2.4 per cent on hopes that their profitability would improve as a result of reduced import competition.

Shares in Firstsource Solutions rose 8.2 per cent, marking a second day of gains, after billionaire investor Rakesh Jhunjhunwala bought a 3.8 per cent stake in the company via a bulk deal on Thursday, according to exchange data.

However, among stocks that fell, United Spirits ended 0.9 per cent lower on profit taking after earlier hitting a record Rs 2,626. Global drinks firm Diageo said on Thursday it completed a share offering that failed to attract enough investors given the low offer price.