Firm world equities drove Indian shares 2.7 percent higher on Monday, their highest single-day gain in nine months, but market participants were unsure whether the rally has legs as high inflation and graft probes weighed. Tata Motors accelerated 5.6 percent, a session after the vehicles maker said surging sales at its luxury Jaguar and Land Rover (JLR) unit helped quadruple third-quarter profit and pledged to lift prices aggressively to offset rising raw material costs.
The 30-share BSE index gained 2.67 percent or 473.59 points to 18,202.20, with 29 of its components advancing. The 50-share NSE index climbed 2.8 percent to 5,456 points. Anish Marfatia, head of sales trading at Avendus Securities said a rise in Asian markets helped Indian shares perform, but it was difficult to predict whether the market would see more gains.
The benchmark index is down 11.2 percent so far in the year, with foreign funds pulling out $1.7 billion from Indian equities. In the week to February 9, investors overall shunned emerging market equities and debt, data from global fund tracker EPFR showed.
Reliance Industries slid as much as 1.7 percent after The Economic Times reported, citing an unnamed source close to proceedings, the markets regulator may impose penalty of upto 15 billion rupees ($328 million) if it establishes the firm was involved in insider trading. The energy major recovered the losses and eked out a 0.5 percent gain at close. Reliance Communications tumbled as much as 4.5 percent after parent, Reliance ADA Group, said late Friday authorities had "examined" some of its officials as part of a probe into a telecoms licence row and that it was co-operating with them.
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