Mumbai: Markets got off to a strong start for August on Monday, rallying more than 1%, after top US lawmakers struck a deal to avoid a debt default and sent Asian equities higher.
Lenders led the gainers, with the sector index climbing 1.4% after sliding 3.5% last week.
“The market is cheering the relief on the US debt front,” said Neeraj Dewan, director of Quantum Securities. “But the domestic issues of inflation and rising interest rates weigh. So we may not see huge gains in the near future till the domestic issues are resolved.”
Top car maker Maruti Suzuki slipped 0.9%, after its July car sales slumped more than 25%.
Indian factory growth fell for the third month in a row in July as a long series of interest rate hikes and faltering global demand weighed on new orders and output growth, a survey showed on Monday.
The central bank had raised key rates by an unexpectedly hefty 50 basis points last week to fight inflation, a move that could dent consumer spending and squeeze corporate earnings.
At 10:41am, the 30-share BSE index had trimmed gains to 0.86% at 18,353.11 points, with 27 components advancing.
The benchmark had slid 3.4% in July, its biggest monthly decline since January.
Foreign funds have invested a net of $2.9 billion over the past five weeks, but the flows have been volatile in recent weeks.
The 50-share NSE index was up 0.8% at 5,526.25 points.
Gainers outnumbered losers in the ratio of 1.3:1 on the NSE, while 153 million shares changed hands.
Leading lenders State Bank of India , ICICI Bank and HDFC Bank rose between 0.9% and 1.8%.
Steel Authority of India Ltd fell as much as 4% to Rs 121.30, its lowest since May 2009, after the largest domestic steel producer posted a 29% slump in quarterly net profit as sharply higher raw material costs hurt margins.
Adani Enterprises Ltd rose 8.3% after it denied on Saturday any links to alleged illegal mining in the southern state of Karnataka and said the company had never had any interest in mining iron ore.
The stock had plunged as much as 26% on Friday on newspaper reports that a Karnataka judicial ombudsman’s report had accused the company of paying bribes and permitting illicit iron ore exports.
JSW Steel tumbled 10.5% to Rs 692.10 after Citigroup cut the steelmaker to “sell” from “buy” and reduced its target price to Rs 612 from Rs 1,254, citing a blanket ban on iron ore mining in Bellary in Karnataka state imposed by the Supreme Court.
The ban is likely to impact costs and volumes for most of the company’s ore, the brokerage said in a note.
The MSCI’s measure of Asian markets other than Japan was up 1.7% and Japan’s Nikkei firmed 1.9%.
Suzlon energy was up 3.3% at Rs 54.15 after the wind turbine maker late on Saturday reported a profit of Rs 60 crore for the June quarter, compared with a loss of 9.12 billion rupees a year ago.
It was the most-traded stock on the NSE.
TVS Motor Co Ltd rose 7.2% to Rs 52.95 after it reported a 46% jump in June quarter net profit and a 14% rise in July sales.