Indian shares rose nearly 1 percent on Monday to snap a three-day losing streak after auto stocks such as Mahindra and Mahindra surged on healthy earnings, while strength in global shares on easing tensions over Ukraine also helped. Global stocks bounced back after recent sell-offs as markets saw a lowered risk of direct conflict between Russia and Ukraine while Middle East tensions appeared less acute.
Foreign investors sold shares worth 5.03 billion rupees on Friday, provisional exchange data showed. June factory output and July retail inflation data due on Tuesday and wholesale inflation on Thursday, will also be watched for gauging the near term direction. "India's earnings growth and valuation outlook are expected to improve further. So, expect the rally to continue," said Dipen Shah, head of private client group research at Kotak Securities.
The broader NSE index rose 0.76 percent, or 57.40 points, to end at 7,625.95, closing above its technically important 50-day moving average at 7,616.74. The benchmark BSE index rose 0.75 percent, or 190.10 points, to end at 25,519.24. Traders cited little impact from the Reserve Bank of India's board meeting in Delhi on Sunday. Finance Minister Arun Jaitley was seen giving conditional support to the central bank Governor Raghuram Rajan's goal of bringing down inflation, even as the government is putting emphasis on stronger economic growth.
Auto makers led gainers on Monday over earnings optimism. Mahindra & Mahindra rose as much as 7.7 percent to its all-time high of 1,323.80 rupees after April-June earnings out on Friday fell than less expected from a year earlier. Tata Motors gained 3.2 percent. The country's biggest auto maker said after the market's close that its June-quarter consolidated net profit more than tripled to 53.98 billion rupees. Among other companies that beat estimates, Adani Enterprises Ltd gained 5.5 percent, while Steel Authority of India rose 2.4 percent.
Realty stocks gained after India's market regulator on Sunday approved the setting up of real estate investment trusts (REITs), a move that may offer a new source of financing to India's cash-strapped property developers. DLF Ltd gained 2.7 percent while Indiabulls Real Estate Ltd rose 0.9 percent. Some tyre makers gained after key input rubber prices dipped to their lowest levels in 4-1/2 years.
Apollo Tyres Ltd gained 1.8 percent and Ceat Ltd added 0.5 percent. However, among stocks that declined, Sun TV Network Ltd fell 5.1 percent after earnings missed some analysts' expectations. IRB Infrastructure Developers fell 0.3 percent, marking its fourth consecutive daily fall on continued profit-taking after shares had surged earlier this year. BNP Paribas downgraded the stock to "hold" from "buy" citing valuations, it said in a report on Friday.