Indian shares rise as Reliance results, foreign inflows boost sentiment

(Reuters) -Indian shares rose on Monday, driven by heavyweight Reliance Industries after it reported better-than-expected earnings, while continued foreign inflows further lifted sentiment.

The Nifty 50 was up 0.9% at 24,255.55 and the BSE Sensex gained 0.98% to 79,989.97 as of 10:33 a.m. IST.

Around a third of the Nifty's gains came from oil-to-telecom conglomerate Reliance Industries, which jumped 3% and hit a six-month high after beating analysts' estimates for quarterly earnings.

"RIL's analyst meeting had a confident tone on the outlook for consumer retail growth normalisation back to double digits and domestic fuel sales increases, with details on ramp-up of the new energy vertical," Morgan Stanley said in a note.

This is a re-rating catalyst for the stock as it marks the reversal of an earnings downgrade cycle, it said.

Barring IT, the other major sectors advanced on Monday. The broader mid- and small-caps rose 0.8% and 0.6%, respectively.

Meanwhile, data showed that foreign investors scooped up Indian stocks worth 324.65 billion rupees ($3.80 billion) over the last eight days in spite of escalating tensions between India and Pakistan.

The major factor contributing to the resilience of the market is the sustained foreign buying due to the relative underperformance of U.S. stocks, bonds and the dollar, said VK Vijayakumar, chief investment strategist at Geojit Investments.

Heavyweight financials, which have significant foreign investor exposure, rose 0.8%, driven by gains in ICICI Bank and Kotak Mahindra Bank, up 1.6% and 1%, respectively.

Among other stocks, Mahindra & Mahindra jumped 1.8% and was among the top three Nifty gainers after it announced plans to acquire a majority stake in SML Isuzu for 5.55 billion rupees.

However, SML Isuzu tumbled 10% as the deal valued its shares at a 63.3% discount to Friday's closing price.

($1 = 85.3400 Indian rupees)