Sensex Rises Ahead of Inflation; Reliance Industries Up

The BSE Sensex pulled higher on Friday after a sluggish start as investors awaited monthly inflation, which would set the tone for the RBI's monetary stance.

The Reserve Bank of India has raised rates a dozen times since mid-March 2010 to rein in high inflation, and it meets on Oct. 25 to review policy with the market cautious on whether it would pause or raise rates again.

We need to see whether inflation is getting under control, whether it is peaking or not, said Ambareesh Baliga, chief operating officer at brokerage Way2Wealth Securities.

If it continues like this, then there will be another rate hike.

The wholesale price index , the most widely watched inflation gauge in India, probably rose 9.70 percent in September from a year earlier, easing slightly from 9.78 percent in August, a Reuters poll showed.

The data is due around noon (0630 GMT).

By 10:13 a.m. (0443 GMT), the main 30-share BSE index was up 0.23 percent at 16,922.44, with 18 of its components rising. The index had opened 0.3 percent down.

Energy major Reliance Industries, India's most valuable firm and the heaviest stock in the main index, rose more than 1 percent, a day ahead of its quarterly earnings announcement.

Analysts polled by Reuters expect Reliance, controlled by billionaire Mukesh Ambani, to report a 16 percent rise in September quarter profit on strong refining margins.

The stock, however, is down a fifth this year on falling gas output.

Banking stocks were mixed. Top lender State Bank of India was down 0.1 percent, while No. 2 ICICI Bank was up 0.1 percent. The sector index was little changed.

RBI Governor Duvvuri Subbarao said on Thursday it was sensitive to both slowing growth and high inflation.

The benchmark BSE index is down more than 17 percent this year as rising interest rates have started biting into corporate profits and a series of scandals have paralysed government policy making.

Shares in top car maker Maruti Suzuki were down 2 percent at 1,037 rupees. The company, majority owned by Japan's Suzuki Motor, is losing output due to a lingering labour strike.

The 50-share NSE index was up 0.19 percent at 5,087.40. In the broader market, there were 604 gainers for 629 losers on total volume of 111 million shares.

Asian shares inched down on Friday, tracking New York and European shares lower as weak Chinese trade data raised concerns about the global economy.

The MSCI's broadest index of Asia Pacific shares outside Japan was down 0.55 percent, while Japan's Nikkei fell 0.75 percent.

STOCKS ON THE MOVE

* DLF fell 3.3 percent to 230.55 rupees after Goldman Sachs removed the stock from its Asia Pacific buy list and downgraded to 'neutral' from 'buy' with a target price of 254 rupees citing limited upside to operational estimates.

* SpiceJet rose 3.6 percent to 21.80 rupees after it said it had allotted 35.9 million shares at a premium of 26.48 rupees to Kalanithi Maran, promoter of the company.

MAIN TOP THREE BY VOLUME

* Kotak Mahindra Bank on 7.7 million shares

* Wire & wireless India on 4.5 million shares

* Tata Motors on 3.8 million shares