The benchmark BSE index rose 0.1 per cent on Monday, enough to post a fifth consecutive winning session, as consumer goods makers such as ITC advanced on hopes slowing inflation and reforms in the upcoming federal budget would boost spending.
The 30-share BSE index Sensex ended at 29,135.88, up 40.95 points and the 50-share NSE index Nifty closed at 8,809.35, up 3.85 points.
Earlier broader gains were however capped in part by companies posting disappointing earnings. Sun Pharmaceutical Industries fell 2.7 per cent after posting on Saturday an unexpected fall in its October-December net profit.
Among BSE sectoral indices, FMCG index was the star-performer and was up 1.79 per cent, followed by realty 0.97 per cent, infrastructure 0.65 per cent and power 0.61 per cent. On the other hand, oil & gas index fell the most by 0.99 per cent, followed by consumer durables 0.98 per cent, banking 0.92 per cent and healthcare 0.87 per cent.
Domestic economy related stocks such as consumer durables gained on hopes of increased spending.
Gainers, losers
Major Sensex gainers were ITC 3.11%, TCS 1.71%, HUL 1.62%, HDFC 1.54% and Bharti Airtel 1.53%, while the top five losers were Sun Pharma 2.65%, Axis Bank 1.73%, Hindalco 1.73%, Hero MotoCorp 1.7% and ICICI Bank 1.66%.
Brokers said sustained buying by foreign funds and retail investors on expectations that the forthcoming Budget will be growth-oriented and the government will accelerate reforms, buoyed the sentiment.
Meanwhile, overseas investors have pumped in over Rs 10,000 crore in Indian capital markets in the first two weeks of this month.
Further, a better trend in global markets boosted the trading sentiment here, they added.
WPI, retail inflation
Meanwhile, according to the government data, wholesale prices declined an annual 0.39 per cent in January, their second fall in three months, on the back of a sharp correction in oil prices.
Retail inflation for January stayed well below the central bank's target, data last week showed, bolstering prospects for further interest rate cuts.
Budget reforms
Investors are hopeful of faster reforms in the government's 2015/16 fiscal budget due on February 28 after the Prime Minister Narendra Modi-led Bharatiya Janata Party was routed in Delhi state elections.
"Lower inflation would boost profit and volumes. Budget is also expected to leave more in the hands of consumer for spending," said Deven Choksey, managing director at K R Choksey Securities.
Global shares hit their highest since September on Monday and the euro firmed, with investors cautiously optimistic that euro zone finance ministers would reach a deal to shore up Greece’s dwindling finances.