Nifty hits record high of 8,180.20; Sensex surges past 27,300

MUMBAI (Reuters) - The BSE Sensex and Nifty rose more than 1 percent on Monday, resuming their record-setting streak after two days of consolidations, as strong foreign buying and weak oil prices stoked buying in blue-chips such as HDFC Bank .

The Nifty gained as much as 1.15 percent to a new high of 8,180.20, while the Sensex rose 1.21 percent to an all-time high of 27,354.99, surpassing their previous records hit on Wednesday.

Weak global economic growth combined with ample supply pushed oil prices below $100 a barrel for the first time in 14 months on Monday. Investors say this will further help the Indian government and the central bank to rein in fiscal deficit and inflation.

Meanwhile, local shares have benefited from strong foreign buying which has led indexes to a string of record highs this year. The 50-share Nifty is the best performing equity index in Asia, up 32.6 percent in U.S. dollar terms for 2014 so far.

Foreign buying is expected to continue after data on Friday showed U.S. employers added the fewest jobs in eight months in August, reviving bets that the Federal Reserve might leave interest rates near zero for longer than anticipated.

"Softening of non-food commodity prices would be the next big trigger for Indian shares. Over the next three years earnings will grow by 16-18 percent and market returns would mirror that," said Harsha Upadhyaya, chief investment officer - equity at Kotak Mutual Fund.

The Sensex rose 1.08 percent, or 293.15 points, to end at 27,319.85.

The Nifty rose 1.08 percent, or 87.05 points, to end at 8,173.90, closing above the psychologically important 8,100 level.

Goldman Sachs raised its Nifty target to 9,000 points for September 2015 from 8,600 points for June 2015, saying earnings sentiment remained positive for the overall market.

Blue-chips led gains after two consecutive sessions of losses. HDFC Bank rose 1.9 percent, while Reliance Industries ended up 1.2 percent after falling 0.54 percent over the last two sessions.

Larsen & Toubro rose 1.04 percent, while ICICI Bank ended 1.3 percent higher.

Oil and Natural Gas Corp gained 2.6 percent after Bank of America Merrill Lynch upgraded the stock to "buy" from "neutral", saying it expected more gains from oil reforms than earlier.

Oil marketing companies surged after Brent crude fell below $100 a barrel for the first time in 14 months. Hindustan Petroleum Corp advanced 4.5 percent, Bharat Petroleum Corp gained 1.7 percent and Indian Oil Corp rose 3.4 percent.

Shares of logistics firms gained ahead of the listing of cold storage company Snowman Logistics in the next few weeks.

Gati jumped 10 percent, Container Corp of India gained 2.8 percent and Balmer Lawrie and Co advanced 2.9 percent.

Cement stocks gained on expectation demand will pick up when the monsoon season ends after September, dealers said. ACC and UltraTech Cements ended up 1.8 percent each.

However, among stocks that fell, Motherson Sumi lost 0.5 percent, adding to Friday's 2.4 percent slump on profit-taking after hitting a record high of 402 rupees.

(Editing by Subhranshu Sahu)