BENGALURU: Indian shares closed higher on Monday, the first trading session of 2023, helped by an uptick in metals and financials.

The Nifty 50 index closed 0.51 percent higher at 18,197.45, while the S&P BSE Sensex rose 0.54% to 61,167.79.

Most of the major sectoral indexes logged gains, with metals and high-weightage financials rising 2.43 percent and 0.49 percent, respectively.

“COVID is the major monitorable in the very near term,” said Yogesh Nagaonkar, founder and CEO of Rowan Capital Services, adding that banking stocks would likely outperform over the next few sessions on strong earnings outlook.

China announced plans to raise export tariffs on aluminium from Jan. 1 in a bid to improve domestic demand, which analysts said will aid market-share growth for Indian companies.

Demand for metals would improve due to China’s reopening as well, analysts added, if the COVID situation remains manageable in the world’s second-largest economy.

Thirty-two of the Nifty 50 constituents advanced, with Tata Steel and Hindalco rising over 5.7% and 2.75%, respectively, after global brokerage firm Jefferies upgraded the stocks to “buy” from “hold” and raised their price target.

Jefferies expects metals demand to improve due to China’s decision to ease its COVID-19 restrictions and measures to support its property sector.

Tata Motors jumped nearly 2% and was among the top Nifty 50 gainers, after the company reported a 10% rise in domestic sales in December.

India’s manufacturing industry improved at the fastest rate in over two years in December.