Jan. 3 (Bloomberg) -- India's energy shares gained, paced by state-run Oil & Natural Gas Corp., on hopes the government will raise auto fuel rates after global crude prices touched $100 a barrel. The stock benchmark swung between gains and losses.

Some government-owned refiners also gained after Oil Secretary M.S. Srinivasan said India may consider raising retail pump prices after Jan. 8.

``If retail prices are raised then the subsidy burden on oil marketing companies will be reduced. It will also result in a reduction in overall losses of these companies,'' said R.K. Gupta, who manages the equivalent of $100 million of stocks at Credit Capital Asset Management Ltd. in New Delhi. ``Some amount of weakness has crept in because world markets are down.''

The Bombay Stock Exchange's Sensitive Index fell 4.1, or 0.02 percent, to 20,461.24 as of 11:03 a.m. local time as most Asian markets declined. The S&P/CNX Nifty Index on the National Stock Exchange added 0.4 percent, to 6,202.10.

Infosys Technologies Ltd. led software stocks lower on fears the U.S., their main market, will slip into recession after reporting the largest drop in manufacturing in five years.

Oil & Natural Gas rose 26.6 rupees, or 2.1 percent, to 1,296. Indian Oil Corp., the country's biggest refiner, gained 10.25 rupees, or 1.3 percent, to 782.05. Hindustan Petroleum Corp., India's second-largest refiner, added 7.8 rupees, or 2.1 percent, to 382. Bharat Petroleum Corp., the nation's third largest refiner, gained 6.95 rupees, or 1.4 percent, to 522.80.

Auto Fuels

India may raise prices of auto fuels for the first time in 18 months. Asia's third largest economy hasn't increased diesel and gasoline prices since June 2006 in a bid to control inflation, while crude oil prices surged 57 percent, or $34.93 a barrel, in 2007.

Infosys fell for a sixth day in a row. The stock slipped 23.4 rupees, or 1.3 percent, to 1,726. Larger rival Tata Consultancy Services Ltd. declined 19.5 rupees, or 1.9 percent, to 1,029.40 and third-ranked Wipro Ltd. fell 7.2 rupees, or 1.4 percent, to 503.85.

U.S. stocks dropped yesterday after the biggest decline in manufacturing in five years sent shares on the Standard & Poor's 500 Index to their worst new year start since 2001.

The Institute for Supply Management's factory index fell to 47.7 from 50.8 the prior month, the Tempe, Arizona-based group said. The figure was lower than forecast by any economist surveyed by Bloomberg News. Fifty is the dividing line between contraction and expansion.

Reliance Unit Listing

Reliance Energy Ltd., the nation's second largest producer of electricity by market value, rose for a third day in a row on continued optimism over the listing of unit Reliance Power Ltd.

It hopes to raise as much as $3 billion in the country's biggest initial public offering by selling 260 million shares at 405 rupees to 450 rupees apiece, three people familiar with the offer said yesterday. Reliance Energy gained 142.50 rupees, or 6 percent, to 2,508, a record.

Mahanagar Telephone Nigam Ltd., India's second-biggest state-run telecommunications company, rose 3.45 rupees, or 1.6 percent, to 214.35 after the Economic Times reported it may get a nationwide license to provide mobile services.

The following stocks rose or fell. Stock symbols are in parentheses after company names.

ACC Ltd. (ACC IN) declined 6.4 rupees, or 0.6 percent, to 1,016 after India's biggest cement maker by capacity said December sales declined 6 percent to 1.57 million metric tons from 1.67 million tons a year earlier.

Hero Honda Motors Ltd. (HH IN) fell 1.85 rupees, or 0.3 percent, to 697.25 after India's biggest motorcycle maker said sales in December dropped 5 percent to 240,532 motorcycles and scooters compared with 252,462 units a year earlier.

State Bank of India (SBIN IN) rose 2.2 rupees, or less than 0.1 percent, to 2,423 after the nation's largest bank by assets said it won government approval to expand its issued capital by as much as 24 percent. The state-owned lender will be able to increase its equity capital to 6.5 billion rupees from 5.26 billion rupees, the Mumbai-based lender said in a statement to the Bombay Stock Exchange yesterday.

To contact the reporters on this story: Shailendra Bhatnagar in New Delhi at sbhatnagar3@bloomberg.net

Last Updated: January 3, 2008 01:58 EST