Indian shares posted their best January rise since 1994, after gaining about 2 percent on Tuesday, as foreign fund inflows showed signs of a revival and investors bet on a monetary easing to rekindle growth in Asia's third-largest economy.
Top lender State Bank of India surged 3.9 percent, propelled by a $1.6 billion capital infusion plan, while No 2 ICICI Bank closed 5.9 percent higher after it posted record quarterly profit, powering the main index to its biggest daily percentage gain in three weeks.
Tata Global Beverages jumped more than 10 percent to its highest close in nearly six months, a day after Starbucks Corp, the world's largest coffee company, announced a deal with the Indian company to open cafes in India. The benchmark 30-share BSE index closed 1.96 percent higher at 17,193.55, with all but five of its components closing in the green. The index had slumped 2.15 percent on Monday, snapping a six-session gaining streak.
"This is a rally driven by global cues, most importantly the development in Greece," said R.K. Gupta, managing director at Taurus Mutual Fund, referring to hopes of a deal this week to free up the next tranche of aid for Greece. India's finance ministry is expected to present its annual budget in March.
The main index rose 11.3 percent in January, its first monthly rise in three, and the best month since September 2010. It was the best January rise for the index since a 19.4 percent rise in 1994. Foreign funds have been net buyers of about $2 billion of Indian shares in January, after net outflows of about $500 million last year.
Shares in State Bank of India (SBI) gained 76.35 rupees to 2,061.60, their highest close since August 23 last year, cheering the federal government move to infuse $1.6 billion through a share purchase to shore up the lender's capital base. Energy major Reliance Industries, India's most valuable company and the heaviest stock in the main index, closed 2.8 percent higher at 817.10 rupees, rebounding from a 3.1 percent fall in the previous session. The 50-share NSE index gained 2.2 percent to 5,199.25. In the broader market, there were more than two gainers for every loser on total volume of about 756 million shares.