Indian shares rose on Monday for a fourth consecutive session to hit four-month highs, boosted by gains in lenders such as ICICI Bank, as investors bet the central bank would cut interest rates at its policy review later this week. The broader NSE index closed 0.7 percent higher at 8,801.05, after earlier hitting its highest since September 23.
The benchmark BSE index ended 0.7 percent up at 28,439.28, after touching its highest since September 26. The Reserve Bank of India is expected to cut interest rates by 25 basis points at its policy review on Wednesday, a Reuters poll showed, after consumer inflation hit a two-year low in December, giving the central bank room to ease.
The positive sentiment lifted midcaps such as Adani Enterprises Ltd, Wockhardt Ltd and Godrej Industries Ltd, sending the NSE midcap 100 index higher by 1 percent to a record high. Still, some analysts say shares could ease as the NSE index approaches the 9,000 level after recent gains. "Markets are in a bullish mood because of rate-cut expectations," said R.K. Gupta, managing director at Taurus Asset Management Company.
"However, irrespective of what the RBI does, I expect the market to correct itself with the upside being 9,000 points." Banking stocks were among the top gainers with ICICI Bank and Bank of Baroda rising as much as 1.94 percent and 2.82 percent, respectively. Among the losers, Dr Reddy's Laboratories Ltd fell as much as 3.14 percent after the company reported a 16 percent drop in its consolidated net profit for the December quarter.
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