Sensex marks one-week closing high; blue-chips gain

MUMBAI (Reuters) - The BSE Sensex rose for a second consecutive session on Tuesday to its highest close in a week as blue-chips such as Reliance Industries gained after foreign investors snapped a five-day selling streak in index futures.

Overseas investors bought index futures worth 860 million rupees ($14.29 million) on Monday, snapping five days of sales totalling 2.43 billion rupees that had raised fears of reduced foreign buying in future.

Gains also tracked higher Asian rivals after an indicator of the services sector rose at its fastest pace in eight months, easily topping forecasts and raising hopes about the U.S. economy.

In India, however, the HSBC Services Purchasing Managers' Index compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50-mark that divides growth from contraction.

Still, analysts cautioned against broad gains ahead of election results on May 16, with shares coming off the record highs hit late last month.

"Market is moving from irrational exuberance to careful selection of portfolio. Expect some more paring of positions," said Deven Choksey, managing director at K R Choksey Securities.

The benchmark BSE Sensex rose 0.28 percent, or 63.30 points, to end at 22,508.42, while the broader Nifty rose 0.24 percent, or 15.95 points, to end at 6,715.30.

Both indexes marked their highest close since April 28.

Reliance Industries rose 1.7 percent while ICICI Bank ended 1.9 percent higher.

Among other blue-chips, ITC rose 0.9 percent while Larsen & Toubro gained 1.3 percent.

NTPC rose 0.4 percent after the Supreme Court told the country's top power producer that it can cut supplies to an electricity distributor in New Delhi if it is not paid arrears by end-May, intensifying a dispute that could lead to blackouts in the capital.

Piramal Enterprises Ltd surged 3.1 percent after the contractor for drug research and manufacturing services on Monday announced a dividend of 52.50 rupees per share when reporting January-March results.

Credit Analysis and Research Ltd rose 1.3 percent after the Reserve Bank of India allowed foreign institutional investors to buy up to 74 percent of the ratings provider.

Titan Company Ltd gained 3.5 percent after its Jan-March profit rose 11.3 percent to 2.06 billion rupees, beating some analyst estimates.

However, among decliners, Canara Bank Ltd slumped 5.5 percent after dealers said the bank's January-March net profit was boosted by a tax refund they estimated at 1 billion rupees ($16.62 million).

(Editing by Sunil Nair)