Mumbai: Shares gained 0.9% on Tuesday, tracking firm Asian peers, with financials leading the charge on investor optimism surrounding loan demand outlook in the world’s second-fastest growing major economy.
Leading banks State Bank of India, ICICI Bank and HDFC Bank gained between 1.7% and 3.1%. Mortgage lenders Housing Development Finance Corp was up 1%.
By 11:26am, the 30-share BSE Index was trading up 0.93% at 20,073.38 points, with 26 of its components gaining.
Traders expect the market to remain steady amid low volumes, in line with the trend normally seen towards the year end.
“The market will be rangebound during the rest of December. Downside appears to be very, very minimum as outlook for economic growth is bright,” said R. K. Gupta, managing director of Taurus Mutual Fund. “The growth story of India remains intact.”
The benchmark index is up nearly 15% so far this year, backed by net foreign portfolio investments of $28.4 billion.
More than two shares advanced for every share that declined in the broader market in a volume of 221 million shares.
Metal producers rose as base metal prices were steady-to-firm in key world markets. Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco gained 2.1% and 3%.
Tata Steel, the world’s seventh-largest maker of the alloy, was trading 1.4% higher. JSW Steel climbed 1.8% after it said it plans to buy a controlling stake in Ispat Industries for $476 million, which analysts said was lower than what had been expected.
Shares in Ispat Industries, which were the most-traded among main shares on the Bombay Stock Exchange, plunged 15.2%.
Software majors Tata Consultancy Services and Infosys Technologies shed 0.6% and 0.2% after hitting all-time highs in the previous session.
The 50-share NSE index was up 0.9% at 6,001.90 points.
The MSCI’s measure of Asian markets other than Japan and Japan’s Nikkei were up 1% and 1.5%.
Top motorcycle maker Hero Hona was down 2.4% at Rs 1,934.50 as traders booked profits after the stock jumped 18% on Monday.
India Infoline jumped 7.4% to Rs 82.10 as the brokerage firm said after trading hours on Monday that it will consider a share buyback proposal on 23 December.