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Money market

India shares advance as US-Mexico trade pact boosts risk appetite

Reliance Industries, NTPC, Infosys among major winners

MUMBAI (NewsRise) -- Indian shares rose for the sixth time in seven days after a trade agreement between the U.S. and Mexico boosted risk appetite, prompting record highs on the Wall Street.

The BSE Sensex rose 0.5% to 38,896.63 and the Nifty 50 Index added 0.4% to 11,738.50 to hit lifetime highs on Tuesday. Out of the Sensex's 30 constituents, 17 stocks ended higher, while 21 of the Nifty's 50 members closed in positive territory.

Reliance Industries, ending 2.1% higher, and Infosys were among the key contributors to the Sensex's advance. The software exporter added 0.7% after a 2.5% gain in the previous session, making up for last week's losses triggered by the resignation of its Chief Financial Officer. NTPC added 1.3%.

Lenders underperformed after an Indian court reportedly refused to provide interim relief to stressed power companies who now face the prospects of being dragged into bankruptcy courts. Analysts said the lack of interim relief to the troubled power sector could prompt an increase in provisioning requirements for banks.

State Bank of India declined 1.1%, ICICI Bank edged 0.3% lower, and Punjab National Bank lost 2.9%.

Power companies, too, fell on Tuesday. Monnet Ispat & Energy dropped 4.7% and GVK Power & Infrastructure lost 1.9%.

The Sensex's rally to record highs came after a positive session on the Wall Street, which spilled over to Asia. The three major U.S. benchmark indexes rose by up to 1% on Monday after U.S. and Mexico reached a trade agreement. President Donald Trump said the agreement would replace North American Free Trade Agreement (NAFTA) and remarked that it was "good deal for both countries."

Hindalco Industries rose 3.6% to 238.80 rupees. JP Morgan reportedly raised the target price on the stock to 370 rupees and maintained the 'overweight' rating, citing improving outlook for aluminium.

Jet Airways closed 4.6% higher after falling by 3.5% in early trade. The airline late Monday reported a net loss of 13.23 billion rupees for the June quarter. The company said its board had considered various cost cutting measures, debt reduction, and funding options, including infusion of capital and monetization of assets.

Fertiliser shares surged amid a report that the government has streamlined payment of subsidy to the sector on a weekly basis. Chambal Fertilisers & Chemicals jumped 6.3%, Rashtriya Chemicals & Fertilizers gained 2.7%, and Madras Fertilizers ended 6.6% higher.

--Nimesh Vora

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