Indian shares closed at their highest level since September as Axis Bank surged on a media report it would become the target of a take-over, although telecom firms fell after Reliance Jio Infocomm unveiled a sharply discounted tariff plan. The benchmark BSE index closed up 0.35 percent at 28,761.59, its highest close since September 22.
The broader NSE index ended 0.32 percent higher at 8,907.85, its highest close since September 9. Axis surged 4.8 percent after CNBC-TV 18 reported that the lender could attract interest from other banks, citing unidentified sources. Axis Bank on Monday denied news reports of a merger with Kotak Mahindra Bank.
Bharti Airtel ended 3.33 percent lower after rival Jio unveiled a plan that would offer sharply discounted data for a year for customers who sign up under the plan. Sentiment was broadly cautious with Asian shares largely flat after a holiday in US markets on Monday. "Overall, the market has moved very marginally in the last few sessions and what it looks like now is a time-based correction with more stock-based moves," said Saurabh Jain, assistant vice-president of research at SMC Global Securities.
"Focus will now rest on global cues such as US interest rates, dollar movement and foreign investment participation." Jio has not shared details of the announcement, but traders say the company will likely give an update on the number of subscribers it has added and also an update about its current plan to offer free data until the end of March.
Jio's free data offer has hit rivals, raising concerns about competition and margins in the sector. On Tuesday, Bharti Airtel was down 2.4 percent while Idea Cellular was 0.2 percent lower. Meanwhile, Ambuja Cements Ltd fell as much as 2.8 percent in its biggest intraday percentage drop since December 12, 2016 on weak December-quarter sales. However, the Nifty IT index rose as much as 1.2 percent to its highest since August 25, 2016 after TCS said on Monday it would buy back shares worth up to 160 billion rupees ($2.39 billion) at a substantial premium, raising expectations rivals such as Infosys would follow suit.
Tech Mahindra climbed 1.9 percent and HCL Technologies gained 1.4 percent, while TCS was down 0.3 percent. Metal stocks also rose with Jindal Steel and Power Ltd gaining as much as 10 percent to its highest since June 3, 2015. India on Monday extended anti-dumping duty on some steel products from China by five years, in a bid to retain protectionist barriers and stem the tide of cheap foreign products.