BSE Sensex at highest ever since April

 The BSE Sensex rose to its highest close since April 3, as cigarette maker ITC, one of the big blue chip gainers this year, recovered from steep recent falls, while Reliance Industries gained on hopes of improving refining margins.

The 30-share BSE Sensex rose 0.4 per cent to 17,538.67 points, having gained 13 per cent so far this year as of Wednesday’s close, compared with a 5.8 per cent gain in the MSCI Asia-Pacific index excluding Japan.

The broader 50-share Nifty rose 0.5 per cent to 5,327.30 points. Indian shares have gained mildly for three consecutive sessions, helped in part by hopes more policy reforms from the government will help extend the strong rally seen last month.

A newspaper report that the government was considering allowing foreign direct investment in the country’s supermarkets lifted shares in retailers such as Pantaloon and Shopper Stop on Thursday.

The global risk environment should be key in the near-term, according to analysts. Sentiment could improve after China’s central bank cut interest rates late on Thursday.

“If China is cutting interest rates, that might be reflection of the fact that they are slowing down substantially,” said V.K Vijayakumar, an investment strategist at Geogit BNP Paribas.

“Globally interest rate will be heading south.” A big chunk of gains in Indian shares have come in June, when the BSE index surged 7.5 per cent. The advances this month, however, have been milder as investors have consolidated some positions.

On Thursday, ITC was among the leading gainers, advancing 1.8 percent after some investors viewed as excessive a 4.9 per cent retreat in the previous three sessions from its record high of Rs 260.4 hit on Monday.

ITC has been one of the best performing blue chips this year, gaining 22.3 per cent as investors have been attracted by a stock that some see as a defensive consumer play with consistent earnings growth potential.

Reliance Industries rose 0.4 per cent, supported by hopes for better refining margins in second half of 2012 and a recent under-performance in the stock.