Sensex rises to near 2-week high; pharma stocks surge

MUMBAI (Reuters) - The BSE Sensex and Nifty rose on Monday, marking their highest intraday level in about two weeks as traders churned positions in favour of defensive stocks especially among drug makers a day ahead of the Reserve Bank of India's policy review.

Sun Pharmaceutical Industries surged to a record high, leading gains in the CNX Pharma Index.

The Reserve Bank of India will most likely leave its benchmark interest rate unchanged at 7.50 percent at the April 7 policy meeting, but reduce it by 25 basis points by the end of June, a Reuters poll found.

"This churn in defensives will be short lived as at least a CRR cut should come, while a surprise rate cut cannot be ruled out," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

The Nifty gained 0.45 percent, while the benchmark BSE Sensex rose 0.5 percent, marking their highest level since March 24.

Stocks so far have ignored concerns over U.S. and European investor groups calling for the Indian government to urgently clarify its tax regime for foreigners, following surprise attempts by tax inspectors to claw back money they say is owed on years of previously untaxed gains.

Pharmaceutical shares outperformed, with Sun Pharma gaining as much as 6.1 percent to hit an all-time high of 1,146.8 rupees.

Cipla rose 3.3 percent, while Dr Reddy's Laboratories gained 1.3 percent.

Among other defensive stocks, cigarette maker ITC rose 2.2 percent while Hindustan Unilever gained 2 percent.

(Reporting by Abhishek Vishnoi; Editing by Anand Basu)