Sensex, Nifty rise 1% as ITC, banks gainSensex, Nifty rise 1% as ITC, banks gain
A bird flies past the Bombay Stock Exchange building in Mumbai

By Sethuraman N R

BENGALURU (Reuters) – Indian shares rose about 1% on Tuesday, lifted by gains in conglomerate ITC and beaten-down financial stocks, and supported by buoyant Asian peers as investors cheered the reopening of some economies amid hopes for stimulus.

The NSE Nifty 50 index rose 0.97% to 9,126.7 by 0502 GMT, while the S&P BSE Sensex gained 0.95% to 30,963.38.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.6% as investors looked past Sino-U.S. trade tensions and focused on more stimulus in China and a gradual reopening of the world economy.

“Opening up of economies right from Japan to Europe is leading to positive sentiment globally and allaying some fears in India as well,” said Siddhartha Khemka, head of research for retail at Motilal Oswal Financial Services in Mumbai.

Shares of ITC Ltd rose as much as 4.6% after the company said on Sunday it would buy spice maker Sunrise Foods.

“Some buying is witnessed in financial stocks after so much of selling we saw last week is also supporting the market,” Khemka said.

The Nifty banking index rose 1.8%, led by a 3.2% surge in HDFC Bank Ltd.

The banking index, which has fallen over 45.4% so far this year, dropped 8.3% last week, with the industry staring at more defaults by businesses hit by the COVID-19 pandemic, raising concerns of a fresh bout of bad loans.

India’s economy is likely to have expanded at its slowest pace in at least eight years in the January-March quarter, partly as a result of the coronavirus clampdown, according to a Reuters poll.

A separate Reuters poll found that Indian stocks will not recoup this year’s losses anytime soon and 2020 will mark the worst annual performance in nine years on fears of a deep downturn in the economy and business activity.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Shounak Dasgupta and Vinay Dwivedi)