MUMBAI (NewsRise) -- Indian shares rose to three-week highs on Monday, buoyed by carmakers and positive cues from U.S. markets.
The BSE Sensex rose 0.9% to 34,445.75 and the Nifty 50 Index advanced 0.9% to 10,582.60. Maruti Suzuki India advanced 3.4% to 9,001.80 rupees. HSBC said in a note that it is upbeat on the carmaker's growth prospects, as the company is a long-term beneficiary of India growth story amid benign competitive pressure. It maintained its `buy' rating on the stock and a target price of 10,400 rupees.
Tata Motors, hovering near its lowest level in two-years, added 3.2%. Mahindra & Mahindra rose 2.3%.
It was a positive beginning to the week for regional markets after the S&P 500 index rallied more than 1.5% on Friday, helping it notch its second weekly advance. The pull back in Treasury yields to one-week lows boosted equities, as U.S. markets continued to recover from the selloff earlier in the month.
"U.S. markets have recovered almost two-third of the selloff seen in early February, helping the positive momentum in Indian markets," said Sageraj Bariya, vice president of institutional sales at East India Securities. "While Indian markets seem to have stabilized, we do not reckon that a new uptrend is in store. Markets are likely to consolidate in the near term."
The main data point for Indian investors will be the December quarter gross domestic product data due on Wednesday. The economic growth is likely to quicken to 6.9% from 6.3% in the prior quarter, according to a Reuters poll.
Dr. Reddy's Laboratories ended up 1.2% after falling by as much as 4.1% earlier in the day. The company said over the weekend that the U.S. drug regulator had asked for more details regarding its manufacturing plant in Andhra Pradesh state.
Larsen & Toubro climbed 2.8% as the infrastructure major trimmed its month-to-date losses to 5.5%. Crude oil explorer Oil & Natural Gas Corp. rose 0.4% as Brent crude prices headed higher for the fourth day to reach three-week highs.
Software exporters slipped, paring a part of their last week's rally that came after an industry association said it was more optimistic on the outlook for technology spending for the next fiscal year. Tata Consultancy Services fell 1.4% and Infosys lost 1.3%.
Oriental Bank of Commerce plunged 10% after reports that India's investigative agency booked a New Delhi-based diamond exporter for a 3.89 billion rupees ($60 million) alleged fraud involving the lender. In addition, The Times of India reported that the Central Bureau of Investigation had filed a case against Simbhaoli Sugars for cheating the lender off 1.09 billion rupees. Shares of Simbhaoli Sugars closed down 15.7%.
On Monday, OBC said in a statement that it had already provided for its exposure to the diamond exporter and there was no additional impact on its profitability. For Simbhaoli Sugars, the lender said that it was "adequately" provided for and there would be no "material" impact on profits.
Welspun Enterprises rose 3.8% after the infrastructure builder emerged as the lowest bidder for a road project awarded by National Highways Authority of India.
Sterlite Technologies jumped 5.8% after the communications equipment maker won an advance purchase order to build Indian Navy's communications network.
-- Nimesh Vora and Vidyut Deshpande