The Sensex and Nifty closed at their highest level since September as Axis Bank surged on a media report it would become the target of a takeover, although telecom firms fell after Reliance Jio Infocomm unveiled a sharply discounted tariff plan.

The benchmark BSE index closed up 100.01 points or 0.35 per cent at 28,761.59, its highest close since September 22.

The broader NSE index ended 28.65 points or 0.32 per cent higher at 8,907.85, its highest close since September 9.

Axis Bank surged as a media report said that the lender could attract interest from other banks, citing unidentified sources. Axis Bank had on Monday denied news reports of a merger with Kotak Mahindra Bank.

Bharti Airtel ended 3.33 per cent lower after rival Jio unveiled a plan that would offer sharply discounted data for a year for customers who sign up under the plan.

Reliance Jio Infocomm , the digital arm of Reliance Industries, has crossed 100-million customer mark 170 days after its launch.

Among BSE sectoral indices, consumer durables index gained the most by 2.44 per cent, followed by banking 0.97 per cent, oil & gas 0.82 per cent and PSU 0.67 per cent. On the other hand, TECk index was down 0.51 per cent and IT 0.17 per cent.

Top five Sensex gainers were Axis Bank (+4.99%), Asian Paints (+1.61%), Reliance (+1.36%), Adani Ports (+1.18%) and HUL (+1.17%), while the major losers were Bharti Airtel (-3.38%), TCS (-1.68%), ITC (-0.94%), Sun Pharma (-0.93%) and Maruti (-0.48%).

Meanwhile, Ambuja Cements Ltd fell as much as 2.8 per cent 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 per cent to its highest since August 25, 2016 after TCS had said on Monday it would buy back shares worth up to Rs 16,000 crore ($2.39 billion) at a substantial premium, raising expectations rivals such as Infosys would follow suit.

Metal stocks also rose with Jindal Steel and Power Ltd gaining as much as 10 per cent to its highest since June 3, 2015.

The Centre had 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.

Asian shares

Asian stocks held ground on Tuesday though Chinese equities surged to a fresh two-month high as domestic funds piled into financial counters on expectations the world's second biggest economy may have turned a corner.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent on Tuesday and held below a 19-month peak hit last Thursday. The index is up more than 11 per cent since December 23, which marked the trough in a sell-off triggered by Donald Trump's surprise win at the US election in November.

With US markets closed for the Presidents Holiday on Monday, Asian markets have had few global cues off which to trade.

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