Indian shares rose on Monday, lifted by consumer stocks such as index heavyweight ITC Ltd, after the Goods and Services Tax (GST) Council cut tax rates on scores of items while keeping the cess on cigarettes unchanged during its weekend meeting.
India slashed tax on products such as paints, leather goods, televisions and washing machines in a move aimed at appealing to traders and the middle classes as Prime Minister Narendra Modi's government faces general elections next year.
ITC, which contributed most to the gains in the broader NSE index, rose as much as 4.6 percent to its highest since Feb. 1. Hindustan Unilever Ltd rose 2 percent.
Following a series of volatile sessions last week, analysts say markets could finally see some consolidation after the Modi government defeated a no-confidence vote in the parliament on Friday.
"Now that the no-confidence debate is over, markets will look to next Wednesday's RBI meet and expect some scepticism if the rates are hiked," said R.K. Gupta, managing director at Taurus Asset Management.
"I think the NSE index will be rangebound with 50-100 points up or down throughout this week."
The NSE Nifty was up 0.31 percent at 11,044.1 as of 0627 GMT, while the benchmark BSE Sensex was 0.27 percent higher at 36,596.53.
Shoemaker Bata India Ltd surged as much as 7 percent to a record of 901.70 rupees on the tax incentives.
UPL Ltd gained as much as 9.6 percent after the agrochemicals company said on Friday it would buy a unit of Platform Specialty Products, Arysta LifeScience, for $4.2 billion.
Paint makers like Asian Paints and Akzo Nobel also gained between 2.3 and 5 percent after the GST council lowered indirect tax slab on paints and varnishes, from 28 percent to 18 percent.
SpiceJet Ltd rose as much as 9.5 percent after an Arbitral tribunal ruled in favour of the airline with regard to disputes with former SpiceJet owner Kalanithi Maran and KAL Airways Pvt Ltd.
Among the decliners, HDFC Bank Ltd shed 2.3 percent after its June-quarter results were below estimates on Saturday.
Bluechip IT company Wipro Ltd fell almost 7 percent after a disappointing first-quarter results.