Indian shares ended at a record closing high on Monday led by State Bank of India after the nation's biggest lender cut deposit rates on the majority of its savings accounts while investors awaited a rate cut by the central bank later this week. The broader NSE index closed up 0.63 percent at 10,077.10, a record closing high, and notched up a monthly gain of 5.84 percent. The benchmark BSE index ended 0.63 percent higher at 32,514.94, also a record-high close, and gained 5.15 percent during the month.
The Reserve Bank of India is expected to cut interest rates when it meets on Wednesday, a Reuters poll showed, responding to an inflation rate running well below target, which had eased to its slowest pace in over five years in June. "We expect the policy committee to lower its natural bias to be cautious and lower policy rates by 25 bps this week," said DBS Group Research in a note. State Bank of India rose as much as 4.8 percent to its highest level since May 19, after it revised its saving bank rate, which the lender said would help it maintain its MCLR at existing rates.
The Nifty PSU bank index, which spiked after SBI's announcement, rose as much as 4 percent to hit its highest in over two months. Shares of Larsen & Toubro rose as much as 4 percent, after having posted a 46 percent rise in quarterly profit on Friday. Meanwhile, the Nifty pharma index declined as much as 1.8 percent, falling for a seventh session in eight, hitting its lowest level since July 5. Dr. Reddy's Laboratories Ltd and Sun Pharmaceutical Industries Ltd fell as much as 3 percent each.
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