India's main stock index climbed 1.95 percent on Friday, its biggest single-day percentage gain since June 29, tracking strong global markets after the European Central Bank's commitment to bond-buying plan revived appetite for risk. Gains in bluechips led by Reliance Industries Ltd , which rose after CLSA said it is "time to cut under-weight" on the stock, also helped the indexes.
Indian stock markets are keenly watching if the government can push forward foreign direct investment and fuel price hike via executive decisions as the monsoon session of the deadlocked parliament ends on Friday. Investors' anxiety is seen rising, as prolonged wait for much touted reform measures is expected to gather further pace next week, ahead of the Reserve Bank of India's policy meeting on September 17.
"Today's jump is just ECB effect but any falls in the next couple of days would be buying opportunity, as I think Chidambaram would achieve reforms on fuel price hike, GAAR and retro tax in September," said Deven Choksey, MD, K R Choksey Securities. India's benchmark BSE index rose 1.95 percent to end at 17,683.73 points, marking its second day of gains.
The 50-share NSE index ended up 1.98 percent at 5,342.10 points, closing above its psychologically important 50 day-moving average of 5271.41 points. Markets also await key macroeconomic data next week. July industrial output data to be released on September 12 and August headline inflation on September 14. Data points will also be key ahead of RBI's monetary policy review on September 17.
Markets expect July IIP growth of around 0.3 percent while August inflation is seen around 7 percent. Indian stock trading in both Bombay Stock Exchange and National Stock Exchange will be opened for 1-1/2 hours on Saturday, September 8 as the BSE is testing its disaster recovery software. Shares in Reliance Industries rose 3.1 percent. Infosys rose 2.7 percent.
Shares in oil marketing companies including Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd extended fall after Oil Minister S. Jaipal Reddy said there was no immediate plan to raise fuel prices. Shares in HPCL fell 1.96 percent, BPCL fell 0.6 percent while Indian Oil Corp Ltd ended 0.3 percent higher.
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