MUMBAI (NewsRise) -- Indian shares advanced Tuesday, led by two-wheeler manufacturers and software exporters.
The BSE Sensex rose 0.3% to 35,378.60 and the Nifty 50 Index climbed 0.4% to 10,699.90. Hero MotoCorp added 1.1% after saying it sold 704,562 motorcycles and scooters in June, an increase of 13% from a year earlier. Bajaj Auto advanced 0.9%, adding to Monday's gains, after it reported a 65% on-year jump in sales last month. India's biggest software companies, Infosys and Tata Consultancy Services, climbed 1.4% and 1.1%, respectively. Both are scheduled to report June quarter earnings next week.
Indian indexes began the day on a defensive note after more losses on the Chinese yuan, which spilled over to other regional currencies and equities. The yuan dropped below the psychologically important 6.7 level following a further escalation in the U.S.-China trade dispute. On Monday, President Donald Trump's administration advised the Federal Communications Commission to deny China Mobile's application to offer telecommunications services, citing national security concerns. The move comes just before U.S. tariffs on $34 billion of Chinese imports are scheduled to take effect.
India's benchmark gauges, nevertheless, managed to erase early losses as the yuan rebounded, which boosted European equities and U.S. index futures. The recovery in the currency came as Reuters reported, citing four traders, that major state-owned Chinese banks were seen swapping yuan for dollars in forwards and immediately selling them in the spot market to prop it up.
China's benchmark index closed 0.4% higher after falling by one percent earlier.
"Protectionist rhetoric will dominate the week, with U.S.'s next tranche of tariffs on purchases from China to take effect on Friday. China is widely expected to retaliate with counter measures," DBS Group Research said in a note. "With temperatures set to rise, markets will remain on the edge."
Vinod Nair, head of research at Geojit Financial Services, said "trade tensions (will) continue to be an overhang on (Indian) markets" and developments on that front will be a key moving part for the Sensex.
Among other movers on the BSE, Oil and Natural Gas Corp. rose 1.3%. The company's board had given an in-principle approval for exploring options for a restructuring, including the merger of subsidiaries Mangalore Refinery & Petrochemicals and HPCL, the Press Trust of India reported.
Maruti Suzuki India closed 1.7% higher. Over the weekend, India' biggest car maker reported a 36% rise in total sales at 144,981 units.
Tata Global Beverages jumped 6.4%, Tata Coffee surged 12.9%, and Tata Chemicals rose 1.7%. The Tata Group is mulling separating the salt and branded lentils businesses of Tata Chemicals and folding them into Tata Global Beverages, Bloomberg reported, citing sources it did not identify. The Group is also considering merging Tata Coffee with the beverages company and making an entry into the dairy segment, the report added.
ICICI Securities dropped 2.2% and ICICI Prudential Life Insurance closed 0.6% higher after falling by more than 3% earlier. India's securities regulator had found ICICI Prudential MF in violation of a code of conduct in relation to the IPO of group company ICICI Securities, Business Standard reported. ICICI Securities' parent ICICI Bank declined 1.6%.