Indian shares rose on Monday, recovering from an earlier fall of 0.5 per cent as gains in a few blue chips such as ITC offset a slump in state-run lenders such as Bank of Baroda because of poor quarterly results.

The broader NSE index closed up 45.85 points or 0.59 per cent at 7,860.75, marking its highest close since May 9, while the benchmark BSE index ended up 163.66 points or 0.64 per cent at 25,653.23.

ITC jumped 3.15 per cent, but Bank of Baroda slumped 8.3 per cent.

Global market sentiment was subdued in the wake of soft Chinese indicators, which have added to doubts about whether the world’s second-largest economy is stabilising.

Investors were spooked after data showed India’s wholesale prices unexpectedly rose for the first time in 18 months in April, ending a period of deflation.

The report comes after data last week showed stronger-than-expected consumer inflation for April, cementing expectations the central bank would not cut interest rates at its policy review on June 7.

“The underperformance is mainly coming from the PSU bank space after quarterly reports and other banks are also joining the cue,” said AK Prabhakar, head of research at IDBI Capital.

Among BSE sectoral indices, FMCG index gained the most by 1.58 per cent, realty 1.47 per cent, metal 0.77 per cent and IT 0.62 per cent. On the other hand, PSU index was down 1.1 per cent, oil & gas 0.41 per cent, capital goods 0.32 per cent and power 0.22 per cent.

Major Sensex gainers were Dr Reddy's (+3.16%), ITC (+3.13%), HDFC Bank (+2.01%), HUL (+1.85%) and HDFC (+1.82%), while the major losers were State Bank of India (-4.22%), Cipla (-1.47%), Adani Ports (-1.38%), ICICI Bank (-1.13%) and BHEL (-0.94%),.

A report by SMC Global said: "Asian stocks rebounded from a one-month low as Japanese shares advanced after a report the government may delay a planned sales tax increase. US stocks ended a rocky week lower, as a slump in consumer-focused companies led major indexes to their third consecutive week of declines.Producer prices in Japan were down 0.3 per cent on month in April, the Bank of Japan said. That missed forecasts for an increase of 0.2 per cent following the 0.1 per cent decline in March. On a yearly basis, process dropped 4.2 per cent versus expectations for a fall of 3.7 per cent following the 3.8 per cent contraction in the previous month. Export prices were up 0.7 per cent on month and down 4.2 per cent on year, the bank said, while import prices added 0.8 per cent on month and plummeted 13.7 per cent on year."

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