MUMBAI (NewsRise) -- Indian shares ended higher Monday, as a rally in global indexes last week boosted risk appetite. However, weak industrial production data and caution ahead of key inflation numbers eroded most intraday gains.
The benchmark BSE Sensex ended 0.35% higher at 24,804.28 points, recoiling from an intraday rise of as much as 0.98%. The Sensex has gained nearly 8% in March, buoyed by the government's fiscally prudent annual budget. The broader NSE Nifty 50 Index rose 0.38% to 7,538.75 points.
Tata Motors, banking stocks and Bharat Heavy Electricals led advances on the Sensex Monday, while Housing Development Finance Corp, Coal India fell.
Data released after markets closed Friday showed India's industrial production slowed 1.5% year-on-year in January, wider than market expectations and worse than the revised 1.2% decline chalked in December.
"Industrial production data suggests that output has continued to contract at the start of this year," said Gareth Leather, Asia economist at Capital Economics. "The continued struggles of industry cast a dark cloud over the Modi government's efforts to revitalize the economy.
Since assuming power in May 2014, Prime Minister Narendra Modi has sought to make the nation a global manufacturing hub and create job opportunities, launching the "Make in India" initiative in September 2014.
Retail inflation data for February are due after markets close Monday. The numbers are a key gauge for the nation's central bank, which is widely expected to cut interest rates at or before its policy review on April 5.
"From the monetary policy perspective, the IIP data, if anything, adds some more weight to the need to reduce funding costs," said Charmy Jain, a manager at primary dealership STCI. "We expect RBI to ease rates by 25 basis points in the upcoming April policy."
Bank of Japan's two-day policy review started today, while the Federal Reserve's meeting begins Tuesday. Bank of England will announce its policy outcome on Thursday.
The three central banks are widely expected to stand pat on policy. Investors are especially awaiting the U.S. Fed's comments for cues about possible rate hikes in 2016. The Fed raised rates for the first time in almost a decade in December, but expectations of further tightening this year receded after global markets went into a tailspin amid concerns of a China-led slowdown.
Markets across Asia largely ignored the weak industrial and retail sales data out of China released over the weekend to close higher Monday, further boosted by an over 1.5% rally in U.S. stocks Friday.
China's Shanghai Composite index and Hong Kong's Hang Seng advanced 1.76% and 1.17%, while Japan's Nikkei 225 index and South Korea's KOSPI rose 1.74% and 0.07%.
On the Sensex, 19 of the 30 constituents ended higher, while overall declining issues outnumbered advancing ones 1,330 to 1,323 and 173 closed unchanged.
Tata Motors rose 3.36% to 365.90 rupees. On Friday, the automaker reported global wholesales, which include numbers for its subsidiary Jaguar Land Rover, rose 17% year-on-year in February. Shares of the country's market leader in commercial vehicles have rallied over 20% this month.
The BSE Bankex was among the better performing sectors Monday, gaining almost 1%.
BHEL, the worst performing stock in the Sensex this year, rose 1.88% to 105.60 rupees. The power equipment maker, which has fallen nearly 38% this year, was recently supported by an announcement that it was awarded a thermal power project from the south Indian state of Tamil Nadu.
NMDC rose 1.78% to 94.55 rupees, after the state controlled mineral producer informed the exchanges late Friday that it had raised iron ore prices effective March 11.
Coal India fell 6.96% to 296.85 rupees, leading losses on the Sensex, after the stock adjusted for an interim dividend of 27.40 rupees per share.
Mortgage lender Housing Development Finance Corp slipped 0.23% to 1,156.05 rupees on profit taking. The company's shares had risen 9% this month till Friday.