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India shares rise to record, powered by Reliance Industries, banks

Fuel retailers too advance following slump in crude oil prices

MUMBAI (NewsRise) -- Indian shares climbed to a record on Thursday, led by index heavyweight Reliance Industries, banks, and fuel retailers after Brent crude prices dropped by the most in more than two years.

The BSE Sensex advanced 0.8% to its all-time high of 36,548.41 and Nifty 50 Index rose 0.7% to 11,023.20, the highest since Jan. 30.

Reliance Industries and financials were the biggest contributors to the Sensex's ascent. Reliance jumped 4.2% to its new lifetime highs and hit $100 billion in market capitalisation after more than 10 years amid continued optimism over its petrochemical, telecom, and retail businesses. Among lenders, State Bank of India added 1.5%, ICICI Bank climbed 1.3%, and HDFC Bank rose 0.9%. Housing Development Finance Corp. advanced 1.7%%.

Fuel retailers Hindustan Petroleum rose 1.5%, Bharat Petroleum gained 2.6%, and Indian Oil ended 1.1% higher after Brent crude prices dropped by almost 7% on Wednesday amid reports of Libya's return to crude oil production.

The advance in financial firms comes before the release of India's June consumer inflation data, due later in the day. A worsening inflation outlook had prompted the country's rate-setting committee to raise interest rates last month. A higher-than-expected reading would cement expectations of a follow-up rate increase when the Monetary Policy Committee decides on interest rates early next month. A poll by Reuters expects prices to have risen by 5.3% in June, up from 4.87% in the prior month.

"Today's rally was a combination of continued buying in heavyweights like Reliance Industries and HDFC Bank and a bit of short covering," said T.S. Harihar, founder and chief executive officer at HRBV Client Solutions. "Reliance and HDFC Bank have compelling stories driving them, and so long as these large names continue to perform, Indian benchmark indexes outperform."

Recovery in regional equities from the previous day's selloff too contributed to gains in Mumbai trading. The Shanghai Composite jumped 2.2% after falling 1.8% on Wednesday, while Hang Seng Index rose 0.6% following the previous day's 1.3% decline. The Nikkei Asia300 Index of companies outside Japan advanced 0.5%.

Among other movers on the BSE, Dr. Reddy's Laboratories rose 2.4%. London-listed Indivior had warned on Wednesday that it would miss its full-year profit target amid rising competition in the U.S. for its best-selling opioid addiction drug. Dr. Reddy's had launched a generic version of that drug last month.

Hindustan Unilever added 1.5% and ITC rose 0.4%, leading consumer sector companies higher. HSBC reportedly said that an expected pick up in rural demand and a low base effect suggest that the growth trajectory for consumer companies in the financial year 2019 remains robust.

The slump in crude prices boosted airline shares. Jet Airways gained1.8%, InterGlobe Aviation added 4.7%, and SpiceJet advanced 2.7%.

Infosys closed 2% lower ahead of its June quarter earnings due Friday.

--Nimesh Vora

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