Sensex extends gains; hopes on RBI action

Sensex extends gains; hopes on RBI action

The BSE Sensex is up 0.73 percent at 19,310.68, and the Nifty is up 0.65 percent at 5,862.35, extending gains, after weak GDP data raised hopes for some monetary easing at the next RBI meeting on December 18.

The Indian economy extended its long slump in the quarter ending in September, with a lower-than-expected growth at 5.3 percent, keeping it on track for its worst year in a decade.

Market participants say growth will recover in the second half of the year, helped by improved global environment and policy action by the government.

Both State Bank of India and Punjab National Bank gain 2.1 percent, with both banks having substantial farm loan exposure, after data showed farming output has grown 1.2 percent in the Sept quarter.

Other blue-chip stocks that gained: Reliance Industries shares up 1.15 percent, while ONGC rises 3.4 percent.

Markets @ 09.00 AM (Reuters)

The BSE index rises 0.35 percent to 19,235.78, while the NSE index up 0.3 percent at 5,842.60.

The BSE index touched an intraday high of 19,323.52, is at its highest level since April 28 2011. 

Asian shares rose to a nine-month peak on Friday, helped by firmer global equities overnight, but flows were largely dictated by month- and year-end position-squaring, with investors taking profits on the rises and buying on dips.

Investors are now confident that the government is in a position from where key reforms can pass through in the winter session of the parliament. Foreign funds net bought shares worth 15.80 billion rupees on Thursday, when the BSE index rose 1.75 percent.

Indian banks have seen a pick-up in demand for credit since the beginning of the festive season in October, and are confident of meeting the central bank's projection for the fiscal year ending in March 2013. 

ICICI Bank rose 1.5 percent, State Bank of India rises 1.5 percent, while mortgage lender HDFC gains 2.3 percent.

Suzlon Energy Ltd shares up 8 percent, adding 20.1 in last two trading session, after sources told Reuters that lenders have agreed to restructure about 110 billion rupees ($1.97 billion) of its debt. 

Traders awaiting September-quarter gross domestic product data, due to be released at 0530 GMT on Friday, with growth seen slowing to its lowest in nearly a decade for the year ending in March.