Indian shares rose about 1 percent on Thursday, marking their highest close in three months, led by banks and index heavyweight Reliance Industries, on hopes a fall in oil prices due to the Iran nuclear deal would lower import costs and interest rates. The BSE index ended up 0.88 percent, while the NSE index, which rose above the 8,600-level, gained 0.99 percent, recording their highest close since April 16.
Oil prices rose on Thursday, but the US and Brent prices are down more than 17 and 15 percent respectively from their June peaks on oversupply, even as the market expects a gradual return of Iranian exports from 2016 to further reduce prices. Investors also look towards the monsoon session of parliament next week where key proposals including land acquisition and national tax reforms are expected to be debated.
Next week's parliament session is expected to be volatile, with political scandals likely to disrupt proceedings and put land, labour and tax reform bills on the back burner. Gains also tracked higher Asian shares after volatile Chinese stocks reversed course and rose, while the dollar stood tall after Federal Reserve Chair Janet Yellen reinforced expectations for a US rate hike.
"Government is facing rough winds on key land acquisition bill, which is definitely a concern," said Deven Choksey, managing director at K R Choksey Securities. Housing Development Finance Corp gained 1.9 percent. Banking stocks such as HDFC Bank rose 1.5 percent, while Axis Bank was up 2.8 percent, Kotak Mahindra Bank was up 1.5 percent. Meanwhile, oil refiners such as Reliance Industries rose 1.24 percent, BPCL gained 1.9 percent. State-run coal miner Coal India rose 0.54 percent.