Banks, energy stocks propel India’s benchmarks toward sixth day of gains

By Vivek Kumar M

(Reuters) -India's benchmark indexes kicked off the week on a positive note, driven by banks and energy companies, setting them on course for a sixth consecutive session of gains.

The NSE Nifty 50 BSE Sensex were each up nearly 1% at 23,547.95 and 77,554.59, respectively, as of 10:23 a.m. IST on Monday.

All 13 major sectors were in the green, with small-cap and mid-cap stocks each rising about 1.2%. Investors continued bargain-hunting, and sentiment was further supported by hopes of foreign investors turning net buyers.

On Friday, foreign portfolio investors (FPI) purchased Indian shares worth 74.70 billion rupees ($868.3 million), the biggest single-day inflow in four months.

FPIs have been buyers in the Indian cash market for three of the last four sessions, indicating a potential reversal after a persistent sell-off over the past six months.

The recent FPI buying was accompanied by short-covering, said Devarsh Vakil, head of prime research at HDFC Securities.

Short-covering is a process of buying back the borrowed shares or contracts to close an existing bearish position.

Vakil said 68% of the FPI positioning still remains on the bearish side, which may lead to further short-covering activity in the coming days, which augurs well for the market.

Heavyweight financials rose 1.4%, led by Kotak Mahindra Bank, which jumped 2.6% to hit its highest levels since October 2021.

Other leading private sector lenders were also ranked among the top gainers on the day, supporting the index's upward momentum.

The energy index rose 1.5%, led by GAIL and Gujarat State Petronet, which rose 5% and 2.5%, respectively, on likely gains from the proposed amendments in gas transmission tariff determination regulations. Shares of Indraprastha Gas rose 3%.

Shares of Larsen & Toubro rose 2% on reports that the infrastructure major may win $4 billion to $4.5 billion expansion project from Qatar Energy.

(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Rashmi Aich, Mrigank Dhaniwala and Sherry Jacob-Phillips)