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Monday November 23, 05:10 PM
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BSE Sensex up 0.9 pct; Reliance gains 3.3 pct
By Ami Shah
MUMBAI (Reuters) - The BSE Sensex (^BSESN : 15997.16 -45.02
) rose 0.9 percent on Monday, powered by Reliance Industries (RELIANCE.NS : 990.5 -2.75) after the energy major's offer to buy a controlling interest in U.S.-based bankrupt petrochemicals company LyondellBasell.
Investors cheered the bid, which comes when global asset prices are cheap after the financial crisis. A deal would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia's SABIC, Germany's BASF and U.S.-based Dow Chemical Co.
Sources have put the value of the cash offer at around $10 billion to $12 billion, which would make it India's second-biggest ever foreign takeover. In 2007, Tata Steel (TATASTL.BO : 540.65 +7.2
) bought Corus for $13 billion.
"In deals like Tata-Corus, the valuations were phenomenally high. But when a company is down and out, it is going to be cheap," said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services, who has bought the stock for his clients.
Reliance, which has the heaviest weight in the main index, climbed 3.3 percent to 2,195.50 rupees, its highest close in more than five weeks.
Vaibhav Sanghavi, director of Ambit Capital, said Reliance's comfortable balance sheet and synergies also helped the stock.
The 30-share BSE index firmed 0.93 percent, or 158.33 points, at 17,180.18, its best close in more than a month.
Two-thirds of its components ended up, while in the broader section gainers led losers in the ratio of 1.3:1 on relatively lower volume of 348 million shares.
The index, which has gained 8.1 percent this month after shedding 7.2 percent in October, is up more than 78 percent in 2009, fuelled by foreign portfolio inflows of more than $15 billion.
Telecom stocks declined as a tariff war in the sector intensified after Tata Teleservices extended its per-second billing scheme to roaming calls.
The telecom regulator said on Friday India would introduce mobile number portability on Dec. 31, and the switching charges for users must not exceed 19 rupees.
"Telecom stocks are bleeding more as the pricing war is worsening with its extension to roaming calls," said Ambareesh Baliga, vice-president at Karvy Stock Broking. Also, with mobile number portability, the question now is how do you hold back your customer."
Top mobile operator Bharti Airtel (BHARTIARTL.BO : 316.4 +2.6) fell 4.5 percent to 275.80 rupees, while rival Reliance Communications (RCOM.NS : 169.2 +1.05) shed 1 percent to 172.05 rupees.
Shares of export-focused outsourcers were pulled down by an appreciating rupee. Bellwether Infosys Technologies (INFOSYS.BO : 2466.7 -4.2) eased 0.8 percent and Wipro (WIPRO.NS : 649.45 -4.85) lost 0.6 percent.
Cigarette-to-hotel group ITC struck an all-time high of 270.20 rupees on good business outlook, analysts said. It ended up 3.5 percent at 269.15 rupees.
The 50-share NSE (^NSEI : 4777.2 -15.45) index closed 1 percent higher at 5,103.55.
"If we break the resistance level of 5,180 we can move higher, but there are chances of cautious stance by investors as we move up," said Baliga.
STOCKS THAT MOVED
* Private refiner Essar Oil (ESSAROIL.NS : 141.9 +2.7) rose 2.1 percent to 139.55 rupees after the Economic Times reported on Saturday Royal Dutch Shell was in talks to buy 10 percent in the company, as part of a deal where Shell would sell three European refineries to Essar.
* Pratibha Industries climbed 4.4 percent to 273.85 rupees. The construction firm said its joint venture with Gammon India won an order worth 3.1 billion rupees from the Bangalore Water Supply and Sewerage Board.
MAIN TOP 3 BY VOLUME
* Suzlon Energy on 9.8 million shares
* Dena Bank on 7.6 million shares
* Gujarat Mineral Development on 7.1 million shares
(Editing by Ranjit Gangadharan)
