Indian shares rose on Tuesday, rebounding from intraday falls of nearly 1 per cent, on value-buying at lower levels, while a rally in Indonesia, which alongside Indian stocks is among the worst performers of the region this year, also helped.
Both India and Indonesia have fallen more than 12 per cent since their record high earlier this year on concerns over slow reforms and protracted economic growth.
The 30-share BSE index Sensex jumped 99.96 points or 0.38 per cent to 26,686.51 and the 50-share NSE index Nifty gained 33.4 points or 0.42 per cent to 8,047.30.
Among BSE sectoral indices, consumer durables index gained the most by 1.18 per cent, followed by auto 1.08 per cent, banking 0.87 per cent and infrastructure 0.85 per cent. On the other hand, oil & gas index was down 0.15 per cent and FMCG 0.07 per cent.
HPCL, IOC, BPCL stocks gain on petrol price hike
— Rajalakshmi Nirmal (@crajalakshmic)
Top five Sensex gainers were Tata Power (+2.57%), Bajaj Auto (+2.44%), HUL (+1.65%), SBIN (+1.62%) and NTPC (+1.33%), while the major losers were VEDL (-1.46%), HDFC (-1.35%), Dr Reddy's (-1.12%), Tata Steel (-0.88%) and BHEL (-0592%).
FII selling, rate cut
But continued foreign portfolio sales and worries that the central bank may not cut rates further this year weighed on the domestic sentiment.
The Reserve Bank of India's projection of inflation rising to 6 per cent in January 2016 and fears of drought are setting up the possibility of no more rate cuts this year.
Meanwhile, overseas investors have sold nearly $215.11 million worth of cash shares in June so far, adding to the $900-million worth shares sold in the previous month, depositary and exchange data showed, amid worries over slow reforms, monsoon and retrospective taxes.
"We expect rate cuts but in January and April," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.
Developments in Greece and US Federal Reserve's commentary would also be important for the near term, he added.
Global markets
Global stocks were down as financial markets braced for the possibility of Greece defaulting on its debt, while a two-day policy meeting of the US Federal Reserve's monetary committee starting later in the day also prompted caution.
European shares hit a near four-month low and yields on lower-rated euro zone sovereign debt climbed to their highest point since November, as financial markets braced for the possibility of Greece defaulting on its debt.
Markets were also cautious ahead of the start of a two-day meeting of the Federal Reserve later on Tuesday, the latest step towards the US central bank’s first rise in interest rates in almost a decade.
But the focus remained squarely on Greece’s fate in the euro zone after both Athens and its creditors hardened their stances following the latest breakdown in talks.