Mumbai, October 4
The Bombay Stock Exchange Sensex rose to a 15-month peak on Thursday, while the NSE Nifty hit a 17-month high, after the government's reform proposals for the insurance and pension sectors sparked gains in financial stocks such as ICICI Bank.

The government's push is raising hopes for more action, especially in further lowering its subsidies and tackling bigger measures such as a reform in the goods and services tax, after already announcing big bang reforms last month.

Investors were also encouraged after India's services sector expanded at its fastest pace in seven months as a spurt in new business encouraged firms to hire more staff, according to a HSBC survey on Thursday, suggesting the worst of the economic slump may be over.

"One may expect record highs by March next year on back of reform measures as investment cycle picks up," said G. Chokkalingam, chief investment officer of Centrum Wealth Management.

Both of India's main indexes surpassed key psychological levels to end at their highest since last year.

The BSE Sensex rose 1.0 % at 19,058.15 to its highest close since July 7, 2011.

The 50-share Nifty gained 0.98% to 5,787.60, its highest close since April 27, 2011.

Financial firms rallied after the cabinet was set to approve later in the day bills that would raise the cap on foreign direct investment in insurance firms and open the pension sector to foreign investors.

Although some analysts expressed doubts about whether both proposals would win parliamentary approval, shares gained nonetheless.

Financial companies with insurance units rose. Reliance Capital rose 1.9%, with shares having surged 41.5% since September. Lenders with pension funds units also rose, with State Bank of India up 2.12% and ICICI Bank up 2.9%.

Brokerages also rallied on hopes for improved stock trading volumes. Motilal Oswal gained 2.4%, while Edelweiss Capital surged 10.3% after earlier rising nearly 15% in intraday trade.

Oil marketing firms extended gains as brent futures prices are falling at a time when the rupee is strengthening, lowering costs for importing crude. HPCL rose 3.2%, while BPCL gained 3.4%. — Reuters

Gurgaon//Mumbai, October 4
Kingfisher Airlines efforts to end the labour stalemate in suffered another setback after the management’s efforts to pursuade’ the striking engineers and pilots to return to work failed miserably at a meeting held in Gurgaon on Friday. A group of employees said the negotiations had "ended in failure" because the airline did not commit to paying overdue salaries.

The employees. who have been protesting over the issue of nonpayment of salaries since March, refused to be persuaded by CEO Sanjay Aggarwal’s pledge to disburse the ovedue salaries. The management reportedly offered to pay the March salary and promised to pay the remaining dues once the airline was recapitalized, but the employees refused to budge.

Kingfisher, once India's second-largest airline, is more than half a year behind on salary payments and has grounded its fleet since Monday after a protest by engineers over the weekend turned violent. Talks with employees in Mumbai on Wednesday ended in a stalemate.

"Employees demanded payment of long pending salary (seven months) prior to resuming operations. All employees expressed their keenness to resume work provided their dues are cleared expeditiously," the group of unidentified employees in Delhi said in a statement on Thursday.

The shutdown has further dimmed the outlook for the airline controlled by liquor baron Vijay Mallya. Kingfisher, which has never turned a profit since its founding in 2005, is saddled with $1.4 billion in debt, owed mostly to government banks led by State Bank of India.

The lenders, which have refused to provide more funds without a capital injection into the carrier, planned to meet with the airline later on Thursday.

Indian banks rarely pull the plug on big companies, with state lenders perceived to be especially willing to help out companies in distress.

"We want a concrete plan from Kingfisher. We need to know how the capital will be infused and then we can see how banks can help," SBI deputy managing director S. Vishvanathan told Reuters ahead of the meeting between the airline and its lenders.

"I don't want people to start speculating. This is a routine meeting to keep ourselves updated," he said.

While the airline has said it is in talks with potential investors including foreign carriers, none has publicly expressed an interest in taking a stake in Kingfisher. India last month allowed up to 49% FDI in civil aviation.

NO PAY, NO FLY: "There is a stalemate," Vikrant Patkar, a pilot in command, told reporters in New Delhi on Wednesday after a meeting with Kingfisher's chief executive and chief operating officers in Mumbai.

New Delhi, October 4
State-run firms Oil India Ltd and Indian Oil Corp have jointly bought a 30 per cent stake in Houston, Texas-based Carrizo Oil & Gas's Niobrara shale asset in Colorado for US $82.5 million, the companies said in a statement.

The deal marks the first investment by the two state companies in shale assets in the United States, where booming shale gas output has caused prices to plummet and may push the US government to consider exports to energy-hungry Asia.

Oil India Ltd (OIL) will acquire 20% and Indian Oil Corp (IOC) will get 10% in Carrizo's Niobrara basin acreage assets through their respective subsidiaries.

"We have earmarked part of our reserves for acquisitions and new opportunities to bolster our overseas portfolio and were keen on joint ventures in countries with geopolitical stability," Oil India chairman S.K. Srivastava told reporters.

India, the world's fourth-largest oil importer, imports about 80 percent its crude needs, and has been scouting for oil and gas assets overseas to satisfy rising local demand and to feed its expanding refining capacity.

The total investment by the two companies would be around $82.5 million, including an upfront cash payment of $41.25 million and a carry amount of $41.25 m, linked to Carrizo's future drilling and development cost, the companies said in a statement.

Oil India may raise $100 million in foreign loans by December to part fund the deal, its finance director said.

As part of the transaction, Oil India and IOC will also receive a 30% interest in Carrizo's existing production of about 1,850 barrels of oil-equivalent a day from 24 gross wells, it said.

Carrizo holds 61,500 gross acres in the Niobrara basin, of which the Oil India-IOC consortium will have 18,450 acres, spread over three counties in Texas.

Oil India, whose assets in India's northeast account for its entire crude oil production and the bulk of gas production, has been aggressively scouting for overseas assets in discovered and producing assets overseas.

The company, along with Indian Oil Corp, the country's biggest fuel retailer, holds stakes in oil and gas blocks in various countries including Venezuela, Libya, Gabon, Iran, Yemen and Nigeria.

India's largest listed company, Reliance Industries, holds stakes in three shale gas joint ventures in the United States, including one with Carrizo in the Marcellus shale acreage in Pennsylvania.

State gas utility GAIL India acquired a 20 percent stake in Carrizo's Eagle Ford shale acreage last year.

Shares in Oil India closed up 2.3% in a strong Mumbai market. Indian Oil shares ended up 2.4%. — Reuters