Indian shares closed 1 percent higher on Monday, posting their highest close in two weeks, as investors shrugged off weak Chinese data and uncertainty whether the US Federal Reserve would hike rates later this week. The benchmark BSE index gained 0.96 percent to close at 25,856.7. The broader NSE index ended 1.06 percent higher at 7,872.25.
Both indexes recorded their highest close since August 31. "Nobody will create big positions, either short or long ahead of the Fed event. Highly volatile movements are expected," Alex Mathews, head of research at Geojit BNP Paribas said.
Indian investors are also keenly awaiting retail inflation data that will be released later on Monday. Slowing retail inflation would provide the central bank wiggle room to cut interest rates, a move that companies say is essential to jump-start growth. India's wholesale prices fell for a tenth straight month in August, tumbling an annual 4.95 percent primarily on the back of a sharp cooling in fuel costs, government data showed on Monday. All sectors were trading in the green barring resources companies. Financial stocks led the gains. Axis Bank gained 1.8 percent, ICICI Bank rose 0.7 percent, while State Bank of India was up 1 percent.
Kesoram Industries rose as much as 13.6 percent after selling its tyre manufacturing unit in northern India for 22 billion rupees ($331.6 million) to JK Tyre & Industries. Meanwhile, resources stocks Reliance fell 0.7 percent, Coal India was down 0.5 percent, while Cairn India slipped 2.5 percent.
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