Indian shares closed higher for the third successive session on Monday, boosted by gains in IT and public sector bank stocks, as investors remained bullish on the outcome of a possible victory for the ruling Bharatiya Janata Party in the western state of Gujarat. The benchmark BSE index closed up 0.62 percent at 33,455.79.
The broader NSE index, which finished above 10,300 for the first time this month, ended 0.55 percent higher at 10,322.25. Markets are hoping for a big success by Prime Minister Narendra Modi and his ruling Bharatiya Janata Party in assembly elections in the western Indian state of Gujarat, with tens of thousands voting in the first stage of the polls on Saturday.
A victory would help boost the government's re-election prospects during general elections in 2019 and reinforce its reform agenda, although analysts said it was already being priced into markets, making the margin of a win crucial to further boost shares. Three recent big polls have predicted a victory for Modi's party, but with a greatly reduced majority.
"If BJP wins, it's definitely good for the markets, but unless they win by a landslide like they did in (in the northern state of) Uttar Pradesh and surprise everyone, markets (NSE index) should remain rangebound in the 10,000-10,500 levels," said R.K. Gupta, managing director at Taurus Asset Management Company. The gains also tracked a 0.4 percent increase in Asia shares ex-Japan after strong U.S payrolls data and better-than-expected Chinese trade data on Friday.
The PSU bank index rose as much as 1.7 percent, with constituent State Bank of India up as much as 2 percent. Private sector lenders Axis Bank and HDFC Bank were up about 0.5 percent each. Property developer Unitech Ltd rose as much as 19.2 percent after a court allowed the Indian government to take over management control of the debt-laden company on Friday.