Indian shares ended higher on Monday, led by gains in financial companies, as strong momentum continued from last week following state election results and the appointment of Shaktikanta Das as the central bank governor. The benchmark BSE index closed up 0.85 percent at 36,270.07, its highest close since December 4, while the broader NSE index ended 0.77 percent higher at 10,888.35, having earlier crossed the 10,900 level for the first time in a fortnight.
Housing Development Finance Corp Ltd was the biggest contributor to the NSE index's gains, with shares closing 2.95 percent higher. Both the NSE and BSE indexes are on track for a fifth straight session of gains, extending an upward momentum from last week buoyed by state election results and the appointment of Shaktikanta Das as the Reserve Bank of India (RBI) governor.
Das' bureaucratic links are expected to heal a rift between the government and the central bank, with expectations that the RBI might come up with measures to ease liquidity further following the government's demands. The RBI board met on Friday to deliberate on its governance framework and decided the matter required "further examination".
Separately, India's November trade deficit narrowed to $16.67 billion due to a fall in gold imports, the country's trade ministry said in a statement on Friday.
However, analysts expect global events to keep markets volatile in the near term.
"Definitely expecting some volatility in the near term due to global events like Fed meet, Brexit," said Vinod Nair, head of research at Geojit Financial Services.
"The valuations in the markets are already high and if the US Fed Reserve says that it would not hike rates in the same frequency next year, expect valuations to rise even further." Shares of power producer NTPC Ltd rose as much as 5.5 percent after brokerage Jefferies said the company would benefit from a regulatory move.
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