Key benchmarks were trading near day's high in afternoon trade. At 13:17 IST, the barometer index, the S&P BSE Sensex, was up 285.89 points or 0.72% at 40,000.09. The Nifty 50 index was up 77.55 points or 0.65% at 12,000.35.
A steep slide in crude oil prices boosted domestic shares. India imports majority of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.
Domestic stocks drifted higher in early trade on buying demand in index pivotals. Stocks extended gains in morning trade after an initial upmove. Key indices marched ahead and hit fresh intraday high in mid-morning trade. The Sensex hit day's high above the psychological 40,000 level and the Nifty hit day's high above the psychological 12,000 level.
Broader market lagged key benchmarks. The S&P BSE Mid-Cap index was up 0.52%. The S&P BSE Small-Cap index was up 0.23%.
The market breadth, indicating the overall health of the market, was negative. On the BSE, 1020 shares rose and 1356 shares fell. A total of 155 shares were unchanged.
Telecom shares advanced. Tata Teleservices (Maharashtra) (up 9.86%), Bharti Airtel (up 0.73%), Vodafone Idea (0.58%) and MTNL (up 0.52%), edged higher.
According to media reports, the Department of Telecommunications (DoT) may auction 4G and 5G spectrum as early as September-October, likely at prices recommended by the regulator.
Two-wheeler stocks were in demand. Bajaj Auto was up 4.20% after the company reported 3% increase in total vehicle sales to 4.19 lakh units in May 2019 over May 2018. Bajaj Auto's total domestic vehicle sales increased 5% to 2.35 lakh units. Total export rose by 1% to 1.83 lakh units in May 2019 over May 2018.
In a separate announcement during trading hours today, Bajaj Auto said that it has agreed on new electric vehicle alliance with KTM Industries AG. As per the deal, Bajaj Auto and KTM Industries AG will develop a common 48 volt electric two-wheeler platform in the power range 3 to 10 kW for planned serial production in India. This platform will support different product variants - scooters, mopeds, small mopeds, under brands of both partners. The serial production will start at Bajaj's production site in Pune by 2022.
Hero MotoCorp was up 5.45%. The company reported sales of 652,028 units of motorcycles and scooters in the month of May 2019. The company recorded a sequential increase in sales compared to the previous month (April 2019) when it sold 574,366 units of two-wheelers.
TVS Motor Company was up 3.39%. The company registered sales of 307,106 units in May 2019 as against 309,865 units in the month of May 2018.
Crude oil prices dropped amid stalling demand as trade wars fanned fears of a global economic slowdown. Brent for August 2019 settlement was down 94 cents at $61.05 a barrel. The contract fell $3.34 a barrel or 5.11% to settle at $61.99 a barrel during the previous trading session.
Overseas, European shares were trading lower while Asian stocks were mixed on Monday amid increasing concerns over the state of global trade.
The Caixin/Markit China manufacturing Purchasing Managers' Index (PMI) for May was 50.2, witnessing a flat performance over month. PMI readings above 50 indicate expansion, while those below that signal contraction. Growth of new orders grew in May and the rate of new business growth improved slightly in the last month, Caixin said in a statement on Monday. However, the survey noted that business confidence slipped to the lowest level since the survey series began in April 2012.
US stocks closed sharply lower Friday, after President Donald Trump unexpectedly announced plans to impose tariffs on imports from Mexico in an attempt to pressure the country to stem the flow of migrants across the U.S. border.
Meanwhile, reports said China may be readying fresh retaliatory moves against the U.S. in that trade dispute, while data showed a contraction in Chinese manufacturing activity this month.
Late Thursday, Trump announced that the U.S. would impose a 5% tariff on all goods from Mexico until that country stops the flow of illegal immigrants into the country. He said the tariffs will rise to 10% on July 1 if the crisis persists, and by another 5% for every successive month, up to 25% by October 1.
In US economic data, the University of Michigan's final consumer sentiment index reading for May came in at 100 versus an initial 102.4, but remained up from 97.2 in April.
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