Indian shares gain over 2% as banks, JSW Steel rise after Bhushan deal

Technology heavyweights Infosys and Tata Consultancy Services also gained

  
People walk past at a screen displaying India's Finance Minister Nirmala Sitharaman presenting the budget, on a facade of the Bombay Stock Exchange (BSE) building in Mumbai, India, July 5, 2019.

People walk past at a screen displaying India's Finance Minister Nirmala Sitharaman presenting the budget, on a facade of the Bombay Stock Exchange (BSE) building in Mumbai, India, July 5, 2019.

REUTERS/Francis Mascarenhas

BENGALURU - Indian shares surged on Tuesday, driven by gains in banks and JSW Steel after the steel conglomerate completed purchase of a rival under a bankruptcy resolution law, helping lenders to recover some of their bad loans.

The blue-chip NSE Nifty 50 index rose 2.3% to 14,845.10 and the benchmark S&P BSE Sensex gained 2.2% at 50,084. Both the indexes fell more than 1% last week.

JSW Steel, which rose 5%, said on Friday evening it had completed a resolution plan for Bhushan Steel and Power, including a payment of 193.50 billion rupees ($2.66 billion) to financial creditors. Indian markets were closed for a holiday on Monday.

"There is good amount of buying in financials and buying continues in the metals too. These (insolvency) resolutions kind of give a lot of positivity to the markets when they come in," said Saurabh Jain, assistant vice president of research at SMC Global Securities in New Delhi, on Monday.

Major lenders to Bhushan, including State Bank of India Punjab National Bank, Canara Bank gained more than 1% each and ICICI Bank rose 2.3%.

The Nifty bank index added 1.7% and the public sector bank index gained 0.7%.

The Nifty metals index climbed 2.8%, while the Nifty information technology index rose 2.9% on expectations of strong results in the upcoming quarter, analysts said.

Shares of Manganese Ore (India) Ltd MOIL jumped 13%, while Steel Authority of India Ltd, Jindal Steel, Tata Steel rose between 3% and 5%.

Technology heavyweights Infosys and Tata Consultancy Services gained 3.67% and 3%, respectively.

Shares of Indian mobile gaming platform Nazara Technologies Ltd surged more than 80% in their market debut on Tuesday, reflecting investor enthusiasm for technology firms in a frenzied period for public listings. It last closed up 45%.

($1 = 72.8000 Indian rupees)

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Shinjini Ganguli) ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))

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