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India Sensex gains most in more than a month as carmakers, banks advance

Tata Motors, Bajaj Auto, Maruti Suzuki among major movers

MUMBAI (NewsRise) -- Indian shares climbed the most in more than a month on Thursday, led by a recovery in automakers and banks.

The BSE Sensex advanced 1.1%, its biggest jump since Nov. 1, to 32,949.21 and the Nifty 50 Index rose 1.2% to 10,166.70. Tata Motors added 1.4% after the company said sales volumes of its Jaguar Land Rover unit increased 10% in November. Two-wheeler maker Bajaj Auto ended a losing spell that started last Thursday, climbing 2.8%. Maruti Suzuki India rallied 3.3% to reach record highs. The nation's biggest carmaker is among the best performers this month after reporting robust November sales.

Among lenders, ICICI Bank jumped 2.2% and State Bank of India rose 1.4% as both recovered from Wednesday's late selloff. Their gains came a day after the country's rate-setting Monetary Policy Committee left interest rates unchanged as expected and stuck to its 'neutral' stance.

Sensex's recovery from six-week lows came after a global selloff in risk assets paused on Thursday. The S&P 500 Index ended little changed overnight to end a three session losing streak. On Thursday, the Nikkei Asia300 Index ended little changed while European markets were trading higher.

Indian shares have come under pressure since last Thursday, which was the day of expiry of monthly derivative contracts, as foreign investors turned net sellers. Overseas investors have pulled out more than $300 million this month from Indian markets through Wednesday. In November, the markets witnessed more than $3 billion of inflows.

"Most of the foreign selling is probably on account of profit taking seen globally in recent sessions," said Akash Jain, vice president of research at Ajcon Global. "Additionally, the risk event of assembly elections in Gujarat is prompting investors to lighten up."

Jain said that "a less than convincing performance" by Prime Minister Narendra Modi's Bharatiya Janata Party in the state election would trigger a selloff. The elections in the Indian state of Gujarat are seen as a test of Modi's popularity after last year's demonetization drive and implementation of the Goods and Service Tax.

Infosys rose 1%. India's second-largest software exporter submitted a settlement application to the country's securities regulator relating to a severance agreement of former Chief Financial Officer Rajiv Bansal.

IRB Infrastructure Developers slumped 2.3% to 205.20 rupees after India's federal investigation agency filed charges against the company for illegal purchase of land. HSBC downgraded the shares to "hold" and cut the target price to 200 rupees.

Hatsun Agro Products rose 1% after the company approved a rights issue to the tune of 9 billion rupees ($139 million).

--Nimesh Vora

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