Indian shares rose amid volatile trade on Monday after three sessions of fall, driven by gains in oil marketing companies such as Reliance Industries Ltd, while non-banking financial companies continued to face stress.
Oil marketing companies rose, with the Nifty Energy index gaining as much as 3.2 percent — its biggest intraday percentage gain since July 12. Hindustan Petroluem Corp Ltd and Indian Oil Corp (IOC) were the top percentage gainers on the NSE Nifty, shares gaining as much as 9.4 percent and 6.5 percent, respectively.
Market heavyweight Reliance Industries surged as much as 5.8 percent, its biggest daily percentage gain since Feb. 27, 2017. It also remained the largest contributer to the index.
India on Saturday sought to assure investors that the government would not go back to regulating fuel prices, after oil company shares tumbled on concerns about a return to a regime that has hurt their profits in the past.
The announcement came after the government said on Thursday it was cutting gasoline and diesel by 2.50 rupees per litre to help Indians struggling to pay fuel prices that had climbed on the back of a rise in global crude prices and a weakening rupee.
IOC Chairman also said at a conference in New Delhi on Monday that prices of fuel continue to be deregulated, soothing the investor sentiment.
The Reserve Bank of India held interest rates unchanged in its monetary policy review on Friday, which led to the rupee hitting a record low and surprising analysts who had expected a rate hike to counter inflationary pressures arising from the weak currency and high oil prices.
"Metal prices in global exchanges are down, leading to metal stocks falling... There is indication that regulator is looking for tighter regulation for non-banking financial services companies," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.
The broader NSE Nifty was up 0.37 percent at 10,354.30 as of 0556 GMT, while the benchmark BSE Sensex was 0.33 percent higher at 34,491.73.
Shares of Yes Bank Ltd gained over five percent after the private sector lender late on Friday gave details of its search and selection committee to find a new chief executive after the central bank trimmed incumbent Rana Kapoor's term.
Shares of non-banking financial services companies plunged, after the central bank on Friday hinted at strengthening guidelines for these companies to avoid rollover risks.
Stocks of IIFL Holdings Ltd, Edelweiss Financial Services, JM Financial Ltd and Dewan Housing Finance Corp declined over six percent each.
Nifty Metal index dropped as much as 3.9 percent with shares of Vedanta Ltd and Hindalco Industries falling three percent each.