Shares edged higher on Monday, driven mostly by a surge in banking stocks after the top court last week provided relief to lenders in a case related to a steel company and on hopes of more support from the government towards ailing sectors. The Supreme Court on Friday cleared the path for steelmaker ArcelorMittal SA to take over bankrupt Essar Steel, and the judgment comes as a big reprieve for banks which are struggling with bad loans worth $140 billion.
"The Essar Steel verdict is very positive for the banking sector. Also, the banking sector results have been marginally better than expected," said Vinod Nair, head of research at Geojit Financial Services. The government is coming up with positive measures to help the economy and ailing sectors like telecom, boosting investor confidence, he added.
The finance minister said on Friday the government was discussing the issue around telecom companies, but no final call had been taken yet. This comes after India`s two top mobile carriers warned last week that their ability to operate and make profits would depend on relief from the government.
The NSE Nifty 50 index was up 0.1% at 11,903 as of 0410 GMT, while the S&P BSE Sensex was 0.3% higher at 40,495. The Nifty public sector bank index was the top gainer, rising 1.4%. State Bank of India led the rally with a rise of 1.8%.