Mumbai/New Delhi, Nov 29
The Bombay Stock Exchange benchmark Sensex surged on Thursday to close at its highest in 19 months after the government agreed to a vote in Parliament on allowing foreign entry in multibrand retail, raising hopes that key reforms will pass through.

Shares were further boosted after Goldman Sachs upgraded Indian stocks to 'overweight' from 'market-weight', citing growth recovery and inflation moderation ahead. The investment bank pegged the December 2013 Nifty target at 6,600 points.

Traders say Moody's stable outlook on India has also eased a potential ratings downgrade worries from Standard & Poor's and Fitch in the near term, adding to positive sentiment.

The rupee also appreciated by more than 1 percent versus the dollar, further helping the markets. Globally, shares rose on Thursday after a senior U.S. lawmaker said the "fiscal cliff" might be resolved.

Globally, European markets traded higher after encouraging comments from US leaders on solving the fiscal cliff issue. Asian markets also ended mostly higher.

Dipen Shah, head of PCG research at Kotak Securities, said while the volatility associated with the series expiry would have contributed partly to the rise, expectations of resumption of the reforms initiatives helped sentiments.

He said the markets have started factoring in some further announcements on fiscal reforms with the deadlock on retail FDI issue being resolved and discussion expected next week. “We’ll watch out for further fiscal initiatives, more so, on core sectors. Initiatives in areas like infrastructure, land acquisition, GST, mining and power will support the sentiment”, he added.

Manish Sonthalia, VP & fund manager at Motilal Oswal AMC-PMS, said the 19,000 figure for the Sensex has come sooner than what most people expected. The markets will see much higher levels in the months to come, he added.

"India is far larger than just retail, but there is some significance attached to it, so if FDI goes through, it will imply the government means business," said Paras Adenwala, MD & principal portfolio manager, Capital Portfolio Advisors. "Even if some bills are cleared in the ongoing session of Parliament, it would be taken constructively by investors."

The BSE Sensex ended up 1.75%, or 328.83 points, at 19,170.91, its highest close since April 28, 2011. The 50-share Nifty gained 1.7%, or 97.55 points, to 5,825.00, on the last day of the November F&O series with high volumes. This was its highest close since April 27, 2011.

The market is awaiting the September-quarter GDP data due to be released on Friday, with growth seen slowing to its lowest in nearly a decade for the year ending in March.

Rate-sensitive stocks such as ICICI Bank rallied on hopes the central bank may cut policy rates if it is satisfied with government measures to reduce fiscal deficit.

Banks also rose on hopes that government would raise the cap on foreign direct investment in insurance, and open the pension sector to foreign investors, tracking new-found optimism around FDI in retail. ICICI Bank rose 4.6%, while HDFC Bank gained 2.8%.

Among other rate-sensitive stocks, Tata Motors rose 4.4%, while Bajaj Auto ended 4.7% higher. Delhi-based realtors surged, with DLF rose 1.6% and Unitech gained 8.6%. Among capital goods stocks that surged were L&T, which rose 2.43%, while Punj Lloyd added 3.74%. Cinemax India rose 5% after it said it would sell a 69.27% stake to local rival PVR, which rose 6.4%.

Mumbai, November 29
The Indian economy is likely to grow by 6.5 per cent in 2013 driven by favourable external demand outlook and domestic structural reforms push, a Goldman Sachs report said on Thursday.

According to a research note by the investment banking major, growth is likely to pick up gradually to 6.5% in 2013 and further to 7.2% in 2014. This is on the back of “easing financial conditions, in part driven by some reduction in policy rates, a continuation of reforms boosting confidence, and a normal agricultural crop,” it said.

The report further noted India’s GDP growth is likely to accelerate from 5.4% in 2012 to 7.2% in 2014, and remain high through 2015-2016, provided the government continues with its reforms push. A continuation of structural reforms is an important assumption underlying these views, it said.

“While allowing FDI in retail, the goods & services tax, direct cash transfer of subsidies, and dedicated freight corridor will help, we believe further reforms on fiscal consolidation, financial liberalization and infrastructure growth will be needed to sustain an improvement in trend growth,” the report said.

The government’s recent reforms include allowing FDI in multibrand retail, aviation, hiking diesel price, capping the number of subsidized LPG cylinders, opening up pension sector to foreign investment and raising the FDI cap in insurance to 49%.

The reforms “which have begun in earnest”, and are likely to progress on a number of different fronts, should help in boosting trend growth.

However, the near-term outlook remains “difficult” due to still weak growth, high inflation, and the twin deficits, Goldman Sachs said and added that quick upturn in the investment cycle is “unlikely”. — PTI

Mumbai, November 29
Multiplex chain operator Cinemax said Thursday its promoters will sell their entire stake of 69.27% in the company to PVR Ltd for Rs 394.98 crore. PVR will also purchase additional up to 26% stake from public shareholders through an open offer.

"The company has been informed by its promoters that they have entered into a definitive sale agreement with PVR (through its wholly-owned subsidiary Cine Hospitality Pvt Ltd) for sale of their entire stake of 69.27% in Cinemax India Ltd," Cinemax said in a filing to the BSE. "The sale has been completed for a total sale consideration of Rs 394.98 crore at a price of Rs 203.65 per equity share," it added.

Cinemax shares on BSE closed at Rs 184.25 apiece, up 4.99% from its previous close.

In a separate filing, PVR also said its board of directors has approved the purchase. "...The board of directors at its meeting held on Nov 29, 2012, approved, subject to receipt of relevant consents under applicable law, the purchase of entire 69.27% stake in Cinemax India Ltd from the Kanakia family," PVR said in the filing.

The PVR board also approved purchase of up to 26% stake of Cinemax India from the public shareholders pursuant to an open offer under the SEBI regulations 2011, the PVR filing added.

Shares of PVR ended at Rs 255.45 apiece, higher by 7.83% that its last close.

PVR, one of the largest multiplex firms in the country runs 197 screens. For the year ended March 31, 2012, the company's total income stood at Rs 513.06 crore, up 11% from Rs 462.22 crore posted in the previous fiscal.

Cinemax operates 138 screens across 39 properties in Ahmedabad, Panipat, Nagpur, Hyderabad, Kolkata, Mumbai, Thane, Bangalore and Pune among others, as per information on Cinemax website. — PTI

Mumbai, November 29
The rupee rose the most in over two months on Thursday after the government agreed to a vote in parliament on allowing foreign investment in multi-brand retail, raising hopes it would muster a majority and push through key reforms.

The rupee, which has been buffeted by concerns of fiscal deficit and a gaping current account gap, found renewed vigour as the government showed spunk and allowed a non-binding vote in parliament on foreign investment in multibrand retail.

The move raised hopes the opposition would now let parliament function smoothly, allowing the passage of key legislation such as foreign investment in pension and insurance, banking law amendment and other bills.

"The feeling is that the UPA (United Progressive Alliance) will do something to get support and that reforms will become a reality," said Subramanian Sharma, director at Greenback Forex, a forex advisory firm. "The break of 55.20 saw the unwinding of long dollar positions and I expect the rupee to move towards 54.20-53.80 to the dollar in the first quarter of next year," he said.

The government move sparked a rally in local equity markets, with the benchmark indices hitting their highest close in 19 months.

Goldman Sachs upgraded Indian equities to 'overweight' from 'market-weight', A further boost was provided by the substantial gains in global markets and commodities as comments from a senior US lawmaker raised hopes of a budget deal by the year-end to avoid a fiscal crisis in the world's biggest economy.

Dealers said foreign institutional investors sold dollars to buy local equities, having already invested $1.2 billion in local stocks in November. — Reuters

New Delhi, November 29
Norway's Telenor ASA is focusing on breaking even by the end of 2013 in the six Indian telecommunication zones where it recently won back airwaves, its CEO said, playing down talks of a deal with a rival in the world's second-biggest mobile phone market.

Jon Fredrik Baksaas said in New Delhi the company will focus its resources on its total investment goal of Rs 155 billion on the six zones where it will operate after its all-India permits were revoked because they were awarded in an earlier corruption-tainted auction.

"There are many questions that need to be addressed from us in the years to come," Baksaas said, when asked if the company would be looking to expand its footprint to other zones through mergers and acquisitions.

"But for now our concentration and focus is clear. Six circles, basic services and break-even for 2013," Baksaas said. India is divided into 22 telecommunication zones.

A source with direct knowledge said earlier this week that Telenor was in talks to merge its Indian operations with Tata Teleservices to gain a bigger foothold in the Indian market. Baksaas said on Thursday he would not comment on "speculation."

Telenor, which has more than 150 million customers in Europe and Asia, will be left with about 30 million customers in India after scaling back its operations, it said in a statement earlier on Thursday.

Baksaas said the company, which said its northern zone of Uttar Pradesh East had broken even, aims to achieve breakeven on an operating and cashflow basis in all its Indian zones by the end of 2013. "It's better to stay profitable in a more concentrated geography than to look at the potential loss-making of a longer business case and an extended business case in a bigger geography," he said. — Reuters

Mumbai, November 29
The Securities Appellate Tribunal (SAT) on Thursday dismissed an appeal by two Sahara group firms against the Securities & Exchange Board of India in the high-profile case involving refund of about Rs 24,000 crore with interest to about three crore investors.

Sahara firms in their appeal had sought the tribunal's intervention in refund of investors' money and had accused the market regulator SEBI of wrongly charging them of noncompliance with a Supreme Court order in this regard.

The tribunal, however, said any further direction in the case can be sought for and granted by the Supreme Court alone and dismissed the appeal.

Passing the order on the appeal filed on November 27, SAT observed that "a contempt petition filed by the respondent board (SEBI) and a review petition filed by the appellants (Sahara group firms) against the order dated August 31, 2012 are already pending before the Supreme Court."

The court had asked Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd to refund an estimated Rs 24,000 crore with an annual interest of 15%, while SEBI was directed to facilitate the refund of this money to about 30 million bondholders of the two firms. — PTI