MUMBAI, Aug 18 (Reuters): The BSE Sensex and Nifty rose over 1 per cent on Monday to a record high as blue-chips such as ICICI Bank surged after Prime Minister Narendra Modi vowed to fire up the bureaucracy to deliver results, while easing wholesale inflation also helped.
The broader Nifty rose as much as 1.14 per cent to 7,880.50, while the benchmark BSE Sensex gained as much as 1.19 per cemnt to 26,413.11, surpassing their previous all-time highs hit on July 25.
Delivering his first Independence Day speech on last Friday, Modi emphasised the need for better governance but announced none of the sweeping market reforms that many who handed him India's biggest election mandate in three decades have been awaiting.
India's wholesale price inflation eased to a five-month low in July, just days after retail inflation accelerated to a two month-high of 7.96 per cent.
Sentiment also got a boost from a strong rebound in European stocks on reduced tension over Ukraine and overseas investors buying shares worth 6.25 billion rupees ($102.86 million) on Thursday, provisional exchange data showed.
"While Modi's speech has added to the confidence, indexes marking new highs amid heavy foreign flows suggests momentum. If flows remain positive then one can expect even higher levels in the near term," said UR Bhat, managing director Dalton Capital Advisors, which advises foreign investors in India.
The BSE Sensex rose 1.1 per cent, or 287.73 points, to end at 26,390.96, while the Nifty advanced 1.06 per cent, or 82.25 points, to end at 7,874.25.
Both the indexes marked their fifth consecutive day of gains, their longest winning streak since July 24 when they gained for eight sessions.
Blue-chip stocks lead gains, with ICICI Bank rising 3.5 per cent and Larsen and Toubro advancing 2.2 per cent.
Oil and Natural Gas Corp gained 5.2 per cent, while Tata Motors rose 4 per cent.
Axis Bank rose 4.5 per cent while State Bank of India ended higher 2.5 per cent.
Tata Motors' Differential Voting Rights shares (DVR) jumped 5.6 per cent after a report in the Times of India newspaper that Indian exchanges may consider admitting such shares on their benchmark indexes, traders said.
Drug maker Cipla Ltd gained 5 per cent after April-June operating margins beat some analysts' estimates.
Low-cost carrier SpiceJet Ltd jumped 12.6 per cent after June quarter operating profit at 90 million rupees ($1.5 million) before restructuring and certain one-off costs, beat some analysts estimates.
Jubilant Foodworks gained 6.2 per cent after Bank of America Merrill Lynch started coverage with a "buy" rating and a target price of 1,375 rupees, saying the company is in a "sweet spot" in the large and high-growth quick service restaurants market.
Oil marketing companies gained after Brent fells below $103 a barrel on easing geopolitical risks.
Hindustan Petroleum Corp gained 6.4 per cent, Bharat Petroleum Corp rose 5.7 per cent while Indian Oil Corp advanced 4.2 per cent.
However, software stocks fell on fears of appreciation in the rupee in the near term, traders said.
Infosys fell 1.5 per cent, Tata Consultancy Services lost 0.5 per cent while HCL Technologies ended down 1 per cent.
