Sensex, Nifty hit life high on Modi hopes, WPI inflation

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex and Nifty rose over 1 percent on Monday to a record high as blue-chips such as ICICI Bank surged after Prime Minister Narendra Modi vowed to fire up the bureaucracy to deliver results, while easing wholesale inflation also helped.

The broader Nifty rose as much as 1.14 percent to 7,880.50, while the benchmark BSE Sensex gained as much as 1.19 pct to 26,413.11, surpassing their previous all-time highs hit on July 25.

Delivering his first Independence Day speech on Friday, Modi emphasised the need for better governance but announced none of the sweeping market reforms that many who handed him India's biggest election mandate in three decades have been awaiting.

 

India's wholesale price inflation eased to a five-month low in July, just days after retail inflation accelerated to a two month-high of 7.96 percent.

Sentiment also got a boost from a strong rebound in European stocks on reduced tension over Ukraine and overseas investors buying shares worth 6.25 billion rupees ($102.86 million) on Thursday, provisional exchange data showed.

"While Modi's speech has added to the confidence, indexes marking new highs amid heavy foreign flows suggests momentum. If flows remain positive then one can expect even higher levels in the near term," said U.R. Bhat, managing director Dalton Capital Advisors, which advises foreign investors in India.

The BSE Sensex rose 1.1 percent, or 287.73 points, to end at 26,390.96, while the Nifty advanced 1.06 percent, or 82.25 points, to end at 7,874.25.

Both the indexes marked their fifth consecutive day of gains, their longest winning streak since July 24 when they gained for eight sessions.

Blue-chip stocks lead gains, with ICICI Bank rising 3.5 percent and Larsen and Toubro advancing 2.2 percent.

Oil and Natural Gas Corp gained 5.2 percent, while Tata Motors rose 4 percent.

Axis Bank rose 4.5 percent while State Bank of India ended higher 2.5 percent.

Tata Motors' Differential Voting Rights shares (DVR) jumped 5.6 percent after a report in the Times of India newspaper that Indian exchanges may consider admitting such shares on their benchmark indexes, traders said.

Drug maker Cipla Ltd gained 5 percent after April-June operating margins beat some analysts' estimates.

Low-cost carrier SpiceJet Ltd jumped 12.6 percent after June quarter operating profit at 90 million rupees ($1.5 million) before restructuring and certain one-off costs, beat some analysts estimates.

Jubilant Foodworks gained 6.2 percent after Bank of America Merrill Lynch started coverage with a "buy" rating and a target price of 1,375 rupees, saying the company is in a "sweet spot" in the large and high-growth quick service restaurants market.

Oil marketing companies gained after Brent fells below $103 a barrel on easing geopolitical risks.

Hindustan Petroleum Corp gained 6.4 percent, Bharat Petroleum Corp rose 5.7 percent while Indian Oil Corp advanced 4.2 percent.

However, software stocks fell on fears of appreciation in the rupee in the near term, traders said.

Infosys fell 1.5 percent, Tata Consultancy Services lost 0.5 percent while HCL Technologies ended down 1 percent.

(Editing by Anand Basu)