(Corrects milestone for BSE to highest close since January 2011
from November 2010, paragraph 8)
* BSE index gains 0.19 pct; NSE index up 0.28 pct
* Rate cut expectations drive blue chips
* Cement makers gain on favourable ruling
By Himank Sharma
MUMBAI, May 17 (Reuters) - Indian shares edged higher on
Friday to new 2-1/2-year highs as continued hopes for rate cuts
bolstered sentiment for blue chips such as ICICI Bank and Larsen
& Toubro, although some analysts warned the recent rally could
be running out of steam.
Cement makers such as UltraTech rose after an Indian
tribunal looking into an appeal on record fines imposed by the
competition watchdog ordered them to deposit only 10 percent of
those fines for now as it continues its deliberations.
The NSE index gained 1.31 percent for the week, posting its
fifth consecutive week of gains. Data showing easing wholesale
inflation on Tuesday has sparked hopes the Reserve Bank of India
may cut interest rates as early as next month, after already
easing rates three times this year.
Strong gains in global share markets have also helped
domestic indexes. Foreign investors have been net buyers for 21
consecutive sessions as of Thursday, bringing in a net of about
$13 billion in 2013, regulatory data shows.
"Markets have been running up one way, mainly driven by
foreign liquidity. There is no big fundamental trigger at this
point except for softening of interest rates and inflation,"
said Deepak Jasani, head of retail research at HDFC Securities.
"In terms of demand and supply scenario, there hasn't been
any major improvement so we do expect a correction in the coming
The NSE index rose 0.28 percent, or 17.40 points, to
6,187.30, its highest close since November 2010.
The benchmark BSE index gained 0.19 percent, or
38.79 points, to 20,286.12 points, marking its highest close
since January 2011.
For the week, the BSE index rose 1 percent.
Rate cut hopes continued to boost ICICI Bank Ltd,
which rose 1.9 percent after earlier hitting its highest since
November 2010. India's biggest private sector lender has gained
almost 6 percent this week.
Engineering and construction companies also gained on hopes
the sector will benefit from interest rate cuts and government
capital spending close to the national elections.
Larsen & Toubro Ltd rose 1.9 percent, while
Jaiprakash Associates Ltd gained 2.8 percent.
Ambuja Cements Ltd rose 2.1 percent, after earlier
hitting its highest since May 3. UltraTech Cement was
up 0.7 percent.
Cement companies were granted a stay on a 60-billion-rupee
($1.1 billion) penalty imposed by the country's competition
watchdog in June, but ordered by the regulatory tribunal to
deposit 10 percent of the amount.
Shares in JM Financial Ltd surged 13.38 percent
after the company said former Citigroup Chief Executive
Vikram Pandit is buying a stake in the Indian financial services
However, drugmakers fell after the Indian government
formally notified a new drug pricing policy designed to increase
the number of drugs deemed essential that are subject to price
Some shares also fell on profit-booking. State Bank of India
fell 0.23 percent after gaining almost 5 percent
earlier this week.
For additional stocks on the move double click
FACTORS TO WATCH
* Yen slides to 4-year low as U.S. data lifts dollar
* Brent slips, but stays above $104 as US data supports
* Yen slumps to four-year low against dollar
* Foreign institutional investor flows
* For closing rates of Indian ADRs
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia........ Japan....... S.Korea...
S.E. Asia....... Hong Kong... Taiwan....
Australia/NZ.... India....... China.....
Wall Street .... Gold ....... Currency..
Eurostocks..... Oil ........ JP bonds...
ADR Report ..... LME metals. US bonds..
Stocks News US.. Stocks News Europe
DIARIES & DATA:
Indian Data Watch Asia earnings diary
U.S. earnings diary European diary
Indian diary Wall Street Week Ahead
Eurostocks Week Ahead
For top Asian company news, double click on:
U.S. company news European company news
Forex news Global Economy news
Technology news Telecoms news
Media news Banking news
Politics/General Asia Macro data
(Editing by Anupama Dwivedi)