Sensex rises about 1.5 percent; HDFC Bank surges to record high

By Tanvi Mehta

REUTERS - Indian shares rose about 1.5 percent on Friday, heading for their fourth straight weekly gain, driven by financials after the RBI allowed foreign investors to resume buying in HDFC Bank Ltd.

Shares of HDFC Bank rose as much as 9.5 percent to a record high of 1,454 rupees, after the Reserve Bank of India removed the bank from the ban list for foreign institutional investors' buying as aggregate foreign shareholding in the bank fell below the prescribed limit under the foreign direct investment policy.

"Some consolidation was due in the market and that's what the market has been doing... Don't think the market will give way easily," said Neeraj Dewan, director at Quantum Securities.

HDFC Bank shares were up 6.8 percent at 0600 GMT, paring gains on some profit-taking.

The broader NSE Nifty was up 0.6 percent at 8,827.8 as of 609 GMT, after rising as much as 1.4 percent to its highest since September 9, 2016 in early trade.

The benchmark BSE Sensex was 0.7 percent higher at 28,505.11, with financials contributing nearly 220 points to the index. Earlier in the day, the index rose as much as 1.5 percent to its highest since September 23, 2016.

Financials surged with the Nifty Bank index rising as much as 4 percent to a record high while both the Nifty Private Bank index and the Nifty Financial Services index gained over 3.5 percent to hit all-time highs.

Pharma stocks also rose with Sun Pharmaceutical Industries among top percentage gainers.

Meanwhile, the operator of the NSE index said on Thursday it would add Indian Oil Corp and Indiabulls Housing Finance as new constituents from March 31 and drop Idea Cellular Ltd and Bharat Heavy Electricals Ltd.

Idea Cellular fell 3 percent while BHEL was down more than 1 percent.

(Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu)