REUTERS - India's stock markets were trading over 1 percent higher on Tuesday in a volatile session, with indexes recovering from year-lows boosted by financial stocks on speculation that the Reserve Bank of India (RBI) may dilute its proposed guidelines on base rates.
The market also got a lift from Chinese shares, which rose nearly 3 percent as a surge in late-afternoon buying helped erase early losses.
Prime Minister Narendra Modi's meeting with representatives of corporate India on weathering the global economic turbulance also helped the sentiment.
The RBI issued draft guidelines last week asking banks to calculate their base lending rates on the basis of the marginal cost of funds instead of the current practice of average cost.
However, traders say that the RBI may issue watered down guidelines and give more time to banks to transition to the new method of calculating base rates.
"Nothing has changed. To my mind the market will continue to remain volatile as long as the fund withdrawals continue to take place," said Deven Choksey, managing director at KR Choksey Securities.
Bargain-hunting was also seen with the Sensex close to giving up gains made since Narendra Modi was sworn in as prime minister, as global markets remained under pressure.
The index is only about 1 to 1.5 percentage points away from the levels it was trading at in late May.
The Sensex was up 1.65 percent, while the broader Nifty was up 1.68 percent at 2:18 a.m., both indexes recovered after slipping past 52-week intra-day lows.
ICICI Bank
NSE index heavyweight Reliance
Hindustan Unilever
Auto stocks like Tata Motors
Pharma stocks took a drubbing with Cipla
(Reporting by Karen Rebelo in Mumbai; Editing by Gopakumar Warrier)
