* BSE gains 0.11 pct, NSE rises 0.08 pct
* FII buying spree continues even as markets consolidate
* Power sector lenders PFC, REC decline
By Abhishek Vishnoi
MUMBAI, Sept 25 (Reuters) - Indian shares edged higher on
Tuesday led by gains in defensive and low-beta stocks such as
ITC on value buying after recent declines on churning
in favour of cyclicals and high-beta stocks on bets of
additional government reforms.
A slew of reforms announced this month generated significant
interest in India stocks with the benchmark index
gaining 7.25 percent and foreign investors pumping in close to
132.2 billion rupees in September so far.
Although analysts expect some consolidation after the trend
changing gains this month and as markets head closer to expiry
of September derivatives contracts on Thursday, it is seen more
as an opportunity to increase exposure in Indian stocks.
"It is definitely consolidation, as markets have lost
momentum because of expiry," Hitash Dang, vice-president at
"Government measures have been extremely good, we expect the
upward momentum to continue post-expiry," he added.
India's benchmark BSE index rose 0.11 percent,
consolidating for the second day after a fast run-up in
September on a heavy dose of reform announcements.
The 50-share NSE index rose 0.08 percent, although
finding resistance at the 5,700 level for a third consecutive
Deutsche Bank in a report said continuing rupee gains and
subdued oil prices will give a 'rare sweet spot' for India,
po sitively impacting the fiscal deficit, and give support to the
the central bank, which has been waiting for inflation to cool.
India's ruling Congress party meets later in the day to
decide on changes in the Cabinet, which are expected to last
until the next general elections in 2014. Traders would be
watching the outcome of the meeting to finetune political
Among defensive stocks, cigarette maker ITC rose
1.9 percent, while Hindustan Unilever rose 2 percent.
Among other low-beta stocks, Cipla gained 2.1
percent on value buying after an 8.7 percent decline in the last
Shares in UB group rallied after Diageo Plc said it
is in talks to buy a stake in Indian billionaire Vijay Mallya's
United Spirits Ltd, reviving an on-again, off-again
courtship that would ramp up its presence in the world's largest
United Breweries Ltd gained 5.9 percent, United
Spirits gained 8.9 percent, Kingfisher Airlines Ltd
rose 7.9 percent, while United Breweries Holdings
rallied 17.6 percent.
Barclays in a note said restructuring measures for state
electricity boards "fall short of expectations", and will serve
as a bailout arrangement, rather than representing tangible
BHEL shares ended 2.4 percent higher, while BGR Energy and
Thermax shares fell 0.5 and 0.43 percent respectively.
Among other decliners, shares exposed to India's state-owned
electricity distributors fell as traders chose to "sell on news"
of government bailout plan for the cash-strapped utilities
saddled with more than $35 billion in debt.
Power sector lender Power Finance Corp fell 1.1
percent, w hile Rural Electrification Corp fell 2.8
Shares in Cairn India fell 3.4 percent after Cairn
Energy was set to sell an 8 percent stake in its former
unit for up to $940 million, in the second such deal in three
Shares in Axis Bank fell 2.71 percent on concerns
over credit provided to Indonesia's PT Bumi Resources,
whose parent company Bumi Plc launched an
investigation into alleged financial irregularities at its
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FACTORS TO WATCH
* Euro falls on report of challenge to ECB
* Oil climbs above $100:Iran in focus
* Growth worries, Spanish concerns check share gains
* Foreign institutional investor flows
* For closing rates of Indian ADRs
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