Sensex rallies to one-month high; FIIs turn buyers

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose for a third consecutive session on Monday to close at its highest in nearly one month, drawing comfort after foreign investors bought shares in the previous session, ending a 13-day selling streak.

Foreign institutional investors bought shares worth 11.24 billion rupees on Friday, snapping 13 days of sales, while they also bought 16.91 billion rupees worth of index futures, data from the National Stock Exchange showed, raising hopes this week's rally would continue.

However, analysts expressed doubts about whether the gains could sustain after volumes on Nifty on Monday fell to their lowest since June 19.

 

Shares could find support, should the government unveil reform measures, with expectations of potential action to open up more sectors for foreign investment.

"Out of compulsion, government would have to do a series of reforms for the economy to pick up in near term," said G. Chokkalingam, executive director and chief investment officer, at Centrum Wealth Management.

The Sensex rose 0.94 percent, or 181.58 points, to end at 19,577.39, marking its highest close since June 3.

The Nifty rose 0.97 percent, or 56.65 points, to end at 5,898.85, gaining for a third day.

Gains were also helped as Reliance Industries rose 2.7 percent, extending recent gains after the government recently approved a hike in gas prices.

Among other blue-chips, Larsen and Toubro gained 3.1 percent while State Bank of India Ltd rose 3.2 percent.

United Spirits gained 13.4 percent after Morgan Stanley Asia (Singapore) Pte increased its stake in the company to 4.76 percent from 4.02 percent.

Reliance Communications rose nearly 12 percent to their highest level in 2-1/2 years after the mobile carrier said it had repaid foreign currency loans worth a total $1.2 billion.

However, among decliners, Infosys fell 1.9 percent after Morgan Stanley said the company may cut its fiscal 2013/14 revenue outlook to 4-6 percent growth, from the 6-10 percent growth it forecast in April.

(Editing by Sunil Nair)