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The Sensex and Nifty ended at a record closing high led by State Bank of India after the nation's biggest lender cut deposit rates on the majority of its savings accounts, while investors awaited a rate cut by the central bank later this week.
The broader NSE index closed up 62.6 points or 0.63 per cent at 10,077.10, a record closing high, and notched up a monthly gain of 5.84 per cent.
The benchmark BSE index ended higher by 205.06 points or 0.63 per cent at 32,514.94, also a record-high close, and gained 5.15 per cent during the month.
Among BSE sectoral indices, consumer durables index was the star-performer and was up 1.86 per cent, followed by metal 1.69 per cent, PSU 1.66 per cent and capital goods 1.4 per cent. On the other hand, healthcare index was down 1.52 per cent and FMCG 0.99 per cent.
Top five Sensex gainers were State Bank of India (+4.46%), Power Grid (+4.23%), Tata Steel (+2.89%), L&T (+2.85%) and ONGC (+2.82%), while the major losers were Sun Pharma (-3.47%), Dr Reddy's (-3.11%), Lupin (-2.9%), ITC (-2.09%) and Cipla (-1.18%).
Shares of State Bank of India went up by nearly 5 per cent today after it slashed the interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of up to Rs 1 crore.
The Nifty PSU bank index, which spiked after SBI's announcement, rose as much as 4 percent to hit its highest in over two months.
Shares of Larsen & Toubro rose as much as 4 per cent, after having posted a 46 per cent rise in quarterly profit on Friday.
Meanwhile, the Nifty pharma index declined as much as 1.8 per cent, falling for a seventh session in eight, hitting its lowest level since July 5.
Pharmaceutical stocks are likely to recover gradually until evidence comes through that the US health regulator is working to lift sanctions on product launches, Sharma said.
Dr. Reddy's Laboratories Ltd and Sun Pharmaceutical Industries Ltd fell as much as 3 per cent each.
Rate cut
The Reserve Bank of India is expected to cut interest rates when it meets on Wednesday, a Reuters poll showed, responding to an inflation rate running well below target, which had eased to its slowest pace in over five years in June.
“We expect the policy committee to lower its natural bias to be cautious and lower policy rates by 25 bps this week,” said DBS Group Research in a note.
“Investors are always interested in rate cuts and have been expecting a rate cut for quite some time now,” said Sunil Sharma, chief investment officer at Sanctum Wealth Management.
Asian markets
Asian shares turned positive after solid Chinese data on Monday following a lacklustre start, while the dollar edged up but remained capped by US political uncertainty.
MSCI's broadest index of Asia-Pacific shares outside Japan reversed early losses to rise 0.1 per cent. The US Dow Jones Industrial Average closed 0.15 per cent higher on Friday.
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