Indian shares rose sharply on Monday, extending last week's 2 percent rally, as solid U.S. jobs data as well as modest growth in the U.S. service sector in July eased global growth worries.
Global cues offered support, with Asian markets rising across the board and European stocks posting modest gains following Friday's rally, after inspectors and Greek government officials said that significant headway had been achieved on further spending cuts that Greece must adopt to secure a EUR 31.5-billion tranche of new aid that is vital to keep the country afloat.
A stronger rupee on the back of some improvement in investor risk appetite and finance minister P Chidambaram's comments that the government will unveil policies in next few days to boost investments and savings in insurance and mutual fund sectors also kept investors in a good mood.
With Chidambaram taking over the charge of the finance ministry last week, Reserve Bank Governor D Subbarao today met the finance minister and discussed the macro-economic situation, reports said.
The benchmark BSE Sensex rose to a high of 17,452 before paring some gains to end up 215 points or 1.25 percent at 17,413, with 21 of its components advancing.
Index heavyweight Reliance Industries soared 5.7 percent to close almost near its day's high after media reports said the energy giant has agreed to share KG-D6 accounts with the CAG under the terms of the production sharing contract.
Tata Motors, Gail India, HDFC Bank, Tata Steel, BHE, Sterlite Industries and Larsen & Toubro were among the other prominent gainers in the Sensex pack, with gains ranging between 2 percent and 4 percent.
Dr Reddy's Laboratories, TCS, Wipro, ITC and NTPC led the decliners, losing between 0.5 percent and 0.8 percent.
The broader Nifty index rose by 67 points or 1.28 percent to 5,283, while the BSE mid-cap and small-cap indexes rose 0.5 percent and 0.8 percent, respectively.
State-run oil marketing companies like BPCL, HPCL and IOC fell about 2 percent each on concerns that their under-recoveries may increase after oil prices jumped nearly 5 percent on Friday.
Airline Jet Airways added 0.9 percent and Spicejet rallied 1.4 percent on expectations the worst is behind them. SAIL rose 0.7 percent despite reporting an 18 percent drop in first-quarter net profit on higher forex losses. IVRCL gained 0.6 percent on winning new orders worth Rs 620 crore across various divisions.
Drug major Sun Pharma rose 1.7 percent ahead of a board meet later this week to consider business restructuring. SKS Microfinance soared 10 percent after the Reserve Bank of India relaxed provision norms governing microfinance institutions.
Aurobindo Pharma eased 0.8 percent and Glenmark edged down 0.3 percent after they received approvals from the U.S. health regulator to manufacture and market generic montelukast tablets. Andhra Bank fell 1.4 percent on reporting a 6 percent fall in quarterly net profit.
by RTT Staff Writer
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