Sensex gains 115 points, snaps two days of losses

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose on Thursday, recovering from two sessions of falls as Power Grid Corp and other blue chips recouped recent losses, while Dr. Reddy's gained after a rival received an import ban on a key competing drug from U.S. regulators.

Traders said the expiry of monthly derivatives at the end of the session sparked less volatility than usual, with broader sentiment also helping as global shares rose towards six-year highs after a raft of positive U.S. economic data.

Still, a stronger-than-expected U.S. economy could hurt Indian shares if it spurts the Federal Reserve to start tapering its monetary stimulus, creating some caution in the weeks ahead.

 

More immediately, traders are looking for India's economic growth data on Friday, which is expected to have picked up 4.6 percent in the July-September period from 4.4 percent in the previous three months.

"Despite whatever comes at global level, election results are most critical thing for the market at this point. Nifty may breakout if they indicate a stable government," said Sudip Bandyopadhyay, managing director of Destimoney Securities Pvt Ltd.

The benchmark BSE Sensex rose 0.56 percent, or 114.65 points, to end at 20,534.91, rebounding from two consecutive day of falls.

The broader Nifty rose 0.57 percent, or 34.75 points, to end at 6,091.85, about 8 points short of a psychologically important 6,100 level.

State-run Power Grid Corp of India Ltd ended up 2.8 percent after being among the leading losers on Wednesday ahead of a share sale that is part of the government's disinvestment programme.

Among other blue chip shares, Infosys Ltd rose 1.1 percent while Mahindra and Mahindra Ltd ended 1.8 percent higher, recovering from falls on Wednesday.

Dr Reddy's Laboratories Ltd shares gained 1.2 percent on hopes of increased market share of a key anti-hypertension generic drug after a second plant operated by its competitor Wockhardt Ltd was hit by the U.S. Food and Drug Administration's "import alert".

IDFC Ltd , a contender for a banking licence by the Reserve Bank of India, gained 1.4 percent after salt-to-software conglomerate Tata Sons withdrew its application for an Indian banking licence.

Tata's withdrawal could increase chances of IDFC obtaining a banking license, traders said.

Apollo Tyres Ltd rose 4.5 percent as some investors were buying call options of December series at 90 rupees on hopes its takeover bid for U.S.-based Cooper Tire & Rubber Co will fail, multiple traders said.

Shares of sugar companies rebounded after Food Minister K.V. Thomas said the government could give financial aid to sugar mills to help them pay farmers higher prices for cane, as surplus production pusheed retail prices ever lower.

Bajaj Hindusthan Ltd rose 4.2 percent after earlier falling a percent, while Shree Renuka Sugars Ltd gained 1.7 percent and Balrampur Chini Mills Ltd ended higher 1.2 percent.

Among stocks that fell, Nestle India Ltd lost 3.8 percent after the company in a statement to exchanges denied any plans by its parent to increase stake the Indian unit.

(Editing by Gopakumar Warrier)