The BSE Sensex rose 0.4 on Monday morning, led by energy giant Reliance Industries after it made an offer to buy a controlling interest in US-based bankrupt petrochemicals company LyondellBasell Industries.
Reliance, which has the largest weighting in the index, was up 1.4 per cent at 2,154.50 rupees.
"The difference between any other large acquisition and this one is that this deal is being pursued at the time of a downcycle in petchem space, making valuations cheap," said Vaibhav Sanghavi, director of Ambit Capital.
"Also, Reliance has always had a comfortable balance sheet. That, along with the synergies and existing liquidity is helping the stock," added Sanghavi.
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Reliance, the country's largest-listed firm, is offering about $12 billion for control of LyondellBasell, according to sources, and if successful it would be one of the largest
overseas acquisitions by an Indian company.
At 10:22 a.m. (0452 GMT), the 30-share BSE Index was up 0.41 per cent at 17,091.75, with 22 components gaining.
"I think we can hold on to the gains in the day as dollar is weak for now. We should close in the green today," said Gajendra Nagpal, CEO of Unicon Financial.
Positive Asian markets also helped sentiment, with MSCI's measure of Asian markets other than Japan rising 0.6 per cent. Japanese markets were closed for a public holiday.
Telecom stocks declined as the tariff war in the sector intensified after Tata Teleservices extending its per-second billing scheme to roaming calls.
Top mobile operator Bharti Airtel dropped 2.7 per cent to 280.85 rupees, while rival Reliance Communications shed 0.9 per cent to 172.25 rupees.
In the broader market, gainers were more than double the number of losers on a volume of 51 million shares.
The 50-share NSE index was up 0.5 per cent at 5,079.05.
STOCKS ON THE MOVE
& Private refiner Essar Oil was up 1.8 per cent at 139.15 rupees. The Economic Times reported on Saturday that Royal Dutch Shell was in talks to buy 10 per cent in the company, as part of a deal where Shell would sell three European refineries to Essar.
& Pratibha Industries was up 3.3 per cent at 270.95 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
& Dena Bank on 3.3 million shares
& Suzlon Energy on 2.4 million shares
& Vijaya Bank on 2.2 million shares
