Indian stocks at 4-month highs

BENGALURU, July 6 (Reuters): Indian shares closed higher on Monday, jumping aboard a China-driven rally in global shares, with HDFC Bank Ltd gaining after it reported strong loan growth through the first months of the COVID-19 crisis.

The benchmark indexes in Mumbai logged their fourth straight session of gains, with the NSE Nifty 50 index ending 1.47 per cent higher at 10,763.65 and the benchmark S&P BSE Sensex up 1.29 per cent at 36,487.28. Both settled at four-month peaks.

Global stock markets rallied as investors bet on a revival in Chinese activity to boost global growth, even as coronavirus cases continued to surge.

India overtook Russia with the world's third-highest number of novel coronavirus cases, at nearly 700,000 as of Monday morning.

"While the case numbers are a deterrent for markets, data including manufacturing activity and car sales released last week indicated that we are coming back to normalcy," said KK Mittal, investment analyst at Venus India.

India, the world's second-most populous country, is slowly limping out of months-long lockdowns triggered by the novel coronavirus.

However, a "robust credit delivery mechanism" helped HDFC Bank, the country's top private-sector lender, report strong growth numbers in the tough environment, according to Macquarie Research.

Shares of the heavyweight bank pared some early gains to settle 2.7 per cent higher, their best closing level since March 11, pushing the Nifty Bank Index about 1.6 per cent higher.

Automaker Mahindra and Mahindra Ltd led gains in per centage terms, rising 7.6 per cent, while Tata Motors Ltd rose 5.4 per cent.

National Fertilizers Ltd soared 20 per cent on its best day since Jan. 2012 after reporting a jump in June-quarter sales.

Consumer goods giant ITC Ltd fell 3.7 per cent and was the biggest loser on the Nifty.

Meanwhile, China began pulling back troops from along its contested border with India on Monday, government sources told Reuters, following a clash between the two countries last month in which 20 Indian soldiers were killed.