Indian shares appeared set to move to new highs this week amid reports a friendly solution to the Reliance Industries family feud is in sight and fears of a bad monsoon lessen, dealers said. The Mumbai Stock Exchange's 30-share benchmark Sensex index closed Friday at 6,748.85, up 41.13 points from the previous week's close.
The markets would be open for an official trading session Saturday to evaluate the exchange's back-up systems, stock exchange officials said.
The strongest trigger for the stock markets could be a settlement of the
the long-running battle between the billionaire Ambani brothers for control of the nation's biggest private sector firm, Reliance Industries, dealers said.
Media reports say a negotiated solution now appears to be acceptable to the Ambani brothers, who got into a public spat mid-November 2004 over ownership issues involving the flagship company, Reliance Industries, and the group businesses related to petrochemicals, energy and broadband.
"The markets will look to how this battle ends. We hope that there are no more hurdles," said a local mutual fund manager.
"Fresh buying by overseas funds will continue to provide momentum. We have seen domestic institutional buying also which could be a positive over the longer term," said Vijay Tilakraj, manager with Cholamandalam Securities.
But the markets would continue to see choppiness at higher levels, dealers cautioned.
Foreign funds have invested 3.36 billion dollars between January and May but were net sellers of Indian stock in May for 261.3 million dollars, according to the Securities and Exchange Board of India.
In 2004, foreigners pumped 8.5 billion dollars into Indian stocks, the most since the country began liberalising its economy in 1991.
Dealers said strong quarterly results from Indian companies have also kept sentiment positive and poised for a near-term rally.
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