Eleven of the 13 major sectoral indexes logged gains, with the metals index rising 1.7% and the auto index adding 0.9%.
The rise in metals stocks comes after China, the world’s largest producer and consumer of metals, announced plans to provide further support to support its post-COVID economic recovery. JSW Steel and Hindalco were among the top Nifty 50 gainers.
Asian markets advanced on hopes of further stimulus measures from China, with the MSCI Asia ex-Japan index gaining 1.5%.
Auto stocks rose, led by TVS Motor Company on reporting a bigger-than-expected rise in quarterly profit, aided by strong two-wheeler demand.
Index heavyweight ITC lost as much as 3.26% and was the top Nifty 50 loser. The company’s board gave in-principle approval to demerge its hotels business into a new entity on Monday. ITC will own a 40% stake, while shareholders will hold the remaining.
“We believe some investors may have preferred a vertical split (100% direct),” Jefferies said in a note.
The stock has lost 6.5% so far this week. The company will host an analyst/investor call on July 27 to discuss further details on the proposed demerger.
“Believe that the gains in the market will be capped in the near-term given elevated valuations and soft start to June-quarter earnings season,” said Pankaj Chhaochharia and Abhimanyu Godara of Antique Stock Broking.
Analysts also expected caution to prevail in markets ahead of the Federal Reserve’s policy meeting on Wednesday.