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India's Sensex logs best month since March 2016

Bharti Airtel leads gains, lenders rise on bank recapitalization plan

MUMBAI (NewsRise) -- Indian shares logged their best monthly advance in nineteen months in October as investors cheered the government's multibillion-dollar bank recapitalization plan and upbeat September-quarter corporate earnings.

The benchmark BSE Sensex added 6.2%, the most since March 2016, while the broader Nifty50 gained 5.6% for the month, its biggest monthly gain since July this year. India's top mobile phone operator Bharti Airtel gained 28.4% in October, its biggest monthly advance since January 2004, while billionaire Mukesh Ambani-led Reliance Industries added 20.6% after the company's telecom arm Jio Infocomm raised prices. State Bank of India rallied 20.8% for its best monthly performance since March 2016.

On Tuesday, the Sensex lost 0.2%, or 53.03 points, to close at 33,213.13, while the broader Nifty 50 ended down 0.3 %, or 28.35 points.

Banking stocks advanced in October after Prime Minister Narendra Modi's government announced a plan to inject 2.11 trillion rupees ($32.4 billion) into state-run banks over the next two years. Investors now await September-quarter earnings for most heavyweight lenders, due next month, and more details about how New Delhi plans to implement the recapitalization. Broadly positive September-quarter earnings also contributed to advances for Indian equities.

"The recapitalization has infused some kind of confidence, but going forward it will also depend on how the banks are lending," said Akash Jain, vice president, equity research, Ajcon Global Services. "Markets are expected to be rangebound in the near term."

On Tuesday, 17 of the 30 Sensex constituents ended lower, while overall advancing issues beat declining ones 1,398 to 1,320 and 166 remained unchanged.

Axis Bank jumped 8% to 523.05 rupees on Tuesday. Bain Capital is in advanced talks with Axis to invest between $750 million and $1 billion for a stake in the lender, The Economic Times newspaper reported.

Dr.Reddy's Laboratories lost 0.1%, despite reporting a better-than-expected second-quarter net profit. Bharti Airtel added 1%. After market hours, the company posted a 77% slump in second-quarter profit.

Infosys fell 2.4% after the stock turned ex-date for the buyback and interim dividend.

Tata Steel lost 2.1% to 703.65 rupees. Jefferies raised the target price to 536 rupees from 424 rupees, but maintained its `Underperform' rating on the stock.

Tech Mahindra and Apollo Tyres declined 1% each ahead of second-quarter earnings due Wednesday.

--Nivedita Naidu

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