Sensex gains in special trading session on Diwali

MUMBAI (Reuters) - The BSE Sensex and the Nifty rose in a special "muhurat" trading session for Diwali on Thursday, led by gains in Suzlon Energy Ltd. while hopes for continued foreign fund inflows into the country also boosted sentiment.

Sentiment for stocks remains supported by hopes for more economic reforms after the government earlier this week lifted price controls on diesel and set the stage for liberalisation of the coal industry.

Investors remain hopeful for further steps after Prime Minister Narendra Modi's party won two state elections earlier this month.

Foreign institutional investors have bought shares worth $13.3 billion so far in 2014.

The Sensex closed 0.24 percent higher at 26,851.05 points, while the Nifty rose 0.23 percent to close at 8,014.55 points.

Wipro Ltd. led the losers with a 3.6 percent drop after its quarterly earnings lagged estimates.

Muhurat means auspicious in Hindi, so the one-hour trading session was conducted during an auspicious time during the five-day Diwali festival. Markets will remain closed on Friday.

Other Asian shares had sagged on Thursday after a retreat on Wall Street and falling crude oil prices rekindled investor anxiety over slowing global growth, while a mixed picture on Chinese manufacturing failed to impress markets. [

Domestic earnings and other global events will remain key for market direction next week.

(Reporting by Swati Bhat; Editing by Alison Williams)