(Reuters) – Indian shares gained on Monday, led by a surge in financial stocks, as investors cheered the government’s decision to withdraw a recent tax surcharge on foreign investors and speed up a $10 billion capital infusion into state-run banks.
The broader NSE Nifty was up 0.7% at 10,908.05 as of 0354 GMT, while the benchmark BSE Sensex was 0.82% higher at 36,995.07.
On Friday, Finance Minister Nirmala Sitharaman outlined a raft of measures in an attempt to lift consumer sentiment and promised more actions soon to revive slowing economic growth.
“Friday’s announcement is a turning point for domestic market. It could have been better if the global factors were also accommodating,” said Sunil Sharma, chief investment officer at Sanctum Wealth Management in Mumbai.
“The development with U.S.-China is an overhang.”
Broader Asian shares slumped on Monday as deteriorating trade relations between U.S. and China shook confidence in the world economy and sent investors steaming to the safe harbours.
India, Asia’s third-biggest economy, is facing a slow growth that has dampened demand for everything from cars to cookies, and a poorly received budget proposal on higher taxes for foreign portfolio investors had contributed to a selloff in the markets.
The Nifty PSU bank index that tracks state-owned lenders rose as much as 6.47%, with a 3.8% rise in State Bank of India.
Shares of Yes Bank Ltd and Indiabulls Housing Finance Ltd were among the top gainers on the NSE Nifty, rising over 3% each.
The Nifty Auto index rose as much as 3.07% but gave up gains to trade 0.74% lower by 0415 GMT
The Indian rupee fell to 72.08 against the dollar, its lowest since Dec. 12, versus Friday’s close of 71.655.
Shares of miners Vedanta Ltd and Tata Steel Ltd were among the top losers on the NSE index, down 3.5% and 3.2% respectively.
Reporting by Chandini Monnappa in Bengaluru; editing by Gopakumar WarrierOur Standards:The Thomson Reuters Trust Principles.