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HDFC Bank, Reliance Industries lead Indian shares to record

MUMBAI (NewsRise) -- Indian shares rose to a record on Monday, driven by gains in HDFC Bank following the lender's first-quarter earnings, while Reliance Industries extended gains on optimism over it wireless unit's launch of a low-cost 4G-enabled phone.

The benchmark BSE Sensex gained 0.7%, or 216.98 points, to 32,245.87, while the broader NSE added 0.5%, or 51.15 points, to 9,966.40. Both the indices closed at a record high, with the Nifty just a few points shy of hitting the 10,000 mark.

"Gains are being led by HDFC Bank and Reliance Industries. Cigarette maker ITC also recovered some lost ground after sharp losses in the previous week," said Akash Jain, vice president for equity research at Ajcon Global Services. "The overall earnings recovery is very crucial for the markets. If there is no earnings recovery, chances are the markets may fall."

HDFC Bank, India's biggest lender by market value, advanced 1.8% to 1,734.55 rupees after the lender reported a 20% on-year increase in first-quarter net profit. Energy-to-telecom giant Reliance, the nation's largest private company by revenue, added 1.9% to 1,616.10 rupees, taking two-day gains to 5.7%. CLSA raised Reliance's price target to 1,920 rupees from 1,710 rupees, citing a boost from the launch of 4G feature phones.

Controlled by India's richest man Mukesh Ambani, Reliance's unit Jio unveiled a 4G-enabled phone on Friday that will be virtually free to users for a one-time refundable deposit of 1,500 rupees ($23). The company's board also announced an issue of one free share for each held.

"HDFC Bank came out with yet another quarter of good results, with loan and deposit growth ahead of our expectations," Siddharth Purohit, an analyst at Angel Broking, said in a research note. "Earnings visibility remains fairly stable for the bank, and we believe the stock will continue to attract premium valuations."

On Monday, nineteen of the 30 Sensex constituents ended higher, while overall declining issues edged past advancing ones 1,385 to 1,317 while 207 remained unchanged.

ITC gained 1.6% to 293.20 rupees. The cigarette maker raised prices across all its brands by 6-7%, Economic Times reported. India last week had increased a tax on cigarettes by as much as 792 rupees per 1,000 sticks under the newly rolled-out Goods and Services tax. ITC shares had slumped 14.4% last week.

India's third-largest software exporter Wipro rose 1.9% to 291.80 rupees, adding to the 6.5% jump on Friday. The company reported a better-than-expected first-quarter profit and announced a share buyback of up to 110 billion rupees ($1.71 billion) last week.

Other software shares also ended higher, attracting investors on relatively cheaper valuations than other sectors, analysts said. Infosys gained 1.2% to 991.20 rupees, while larger rival Tata Consultancy Services finished 1.7% higher at 2,532.65 rupees.

Ahead of its quarterly results Tuesday, Bharti Airtel ended up 2.2% at 420.20 rupees, while private lender Axis Bank fell 1.1% to 534.30 rupees.

Auto-parts maker Amtek Auto gained 4.9% to 31.15 rupees, its daily permissible limit. The company said late Friday that Amtek Global Technologies, a subsidiary, has entered into an arrangement to sell its U.K.-based plants to Liberty Group.

Most regional markets ended higher Monday. Investors' focus would now turn to the U.S. Federal Reserve's review later this week for further cues. As the Fed is expected to leave interest rates unchanged at its two-day meeting that starts Tuesday, investors' primary attention will be on whether the authority provides cues on when it will start normalizing its balance sheet. The Nikkei Asia300 Index of more than 300 influential companies in the region rose 0.6%.

--Dhanya Ann Thoppil

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