Indian shares reversed course to end higher on Tuesday, with ICICI Bank Ltd and State Bank of India leading the gains after the central bank's decision to allow lenders to spread their bond trading losses, in a move that will likely boost the profitability of banks. The broader NSE index closed up 0.33 percent at 10,245.00, while the benchmark BSE index ended 0.35 percent higher at 33,370.63.
ICICI Bank and SBI snapped two sessions of declines to close up 3.1 percent and 1.8 percent respectively. Investor sentiment was subdued as renewed fears of a trade war between the United States and China and a slump in tech shares such as Amazon.com triggered a global selloff. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.28 percent.
On the other hand, shares of state-run lenders rose after India's central bank allowed banks to spread their bond trading losses, in a move that will likely boost the profitability of banks. "Investors are a bit cautious as global markets are down. However, banks are doing well today because of RBI's latest move, which is supporting the markets," said Neeraj Dewan, director, Quantum Securities.
The Nifty PSU bank index climbed as much as 2.9 percent and was on track to snap a two-day losing streak. Meanwhile, Wipro and Tech Mahindra Ltd led losses on the NSE index, falling over 2 percent each, as investors booked profits. Both stocks had gained in the last three sessions. Oil marketers also gained, with Hindustan Petroleum Corp Ltd rising 3.6 percent while Indian Oil Corp Ltd and Bharat Petroleum Corp Ltd were up over 1 percent each.
Motherson Sumi Systems rose as much as 5.2 percent after the auto parts maker's unit signed a deal to buy Reydel Automotive for $204 million in cash. Shares of tyre makers such as MRF Ltd and Apollo Tyres Ltd also gained due to falling rubber prices.
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