Sensex Index Climbs

Indian Stocks Rise; Reliance Leads Advance, Hindalco Declines

June 30 (Bloomberg) -- Indian stocks gained. Reliance Industries Ltd. rose after a report it may enter a financial- services venture. Oil & Natural Gas Corp., the nation's largest state explorer, extended gains after fuel-price caps were lifted.

Reliance Industries, India's most valuable company, added 2.1 percent. The Economic Times said it's close to reaching an agreement to form a venture with DE Shaw & Co., citing two people it didn't identify. Oil & Natural climbed to a record.

"We are seeing stock-specific activity," said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi, southern India. Mathews prefers oil refiners' shares.

The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 72.19, or 0.4 percent, to 17,606.28 at 1:56 p.m. in Mumbai. The index swung between gains and losses at least five times. The gauge is set for a sixth quarterly advance, its longest winning streak since September 1979, according to data compiled by Bloomberg.

The S&P CNX Nifty Index on the National Stock Exchange rose 0.4 percent to 5,277.20. The BSE 200 Index increased 0.3 percent to 2,235.47.

Reliance Industries gained 2.2 percent to 1,091.8 rupees. Manoj Warrier, a spokesman for the company, declined to comment on the report of the possible financial-services venture with DE Shaw when reached by telephone today.

Oil Companies

Oil & Natural climbed 1.1 percent to 1,320 rupees, extending gains for a fourth day. The shares have surged 11 percent since June 25, when India's government said it would lift caps on fuel prices. Indian Oil Corp., the nation's second- biggest refiner, added 2.4 percent to 402.8 rupees.

"Oil and gas companies are going to show robust growth," Sadanand Shetty, who manages $75 million in equities at Taurus Asset Management Co. in Mumbai said in an interview yesterday. "Price decontrol will really be a big kicker. The average increase in earnings for oil companies would be in the range of 30 percent to 50 percent."

Bharat Petroleum Corp. soared 4.1 percent to 661 rupees, and Hindustan Petroleum Corp. jumped 6.8 percent to 465.7 rupees.

Hindalco shed 1.3 percent to 142.35 rupees, extending yesterday's 4.3 percent drop. The Reuters/Jefferies CRB Index of 19 raw materials tumbled 2.8 percent yesterday, the most since Aug. 14.

Overseas funds bought a net 8.8 billion rupees ($190.7 million) of Indian equities on June 28, increasing their total investments in the stocks this year to 312.5 billion rupees, according to the nation's market regulator.

Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net .