Indian shares rose on Tuesday as the good progress of monsoon rains lifted consumer goods makers such as Hindustan Unilever that depend on the rural economy, though trading volumes were thin due to continued concerns about the Brexit fallout.

Besides, short-covering ahead of June derivatives expiry on Thursday boosted the domestic sentiment.

The 30-share BSE index Sensex ended higher by 121.59 points or 0.46 per cent at 26,524.55 and the 50-share NSE index Nifty closed up by 33.15 points or 0.41 per cent at 8,127.85.

Among BSE sectoral indices, FMCG index gained the most by 1.75 per cent, metal 1.01 per cent, oil & gas 0.84 per cent and PSU 0.78 per cent. On the other hand, IT index was down 0.89 per cent, TECk 0.46 per cent and consumer durables 0.08 per cent.

Top five Sensex gainers were Lupin (+4.39%), HUL (+3.25%), ITC (+2.59%), Cipla (+1.61%) and Coal India (+1.43%), while the major losers were Tata Motors (-1.84%), TCS (-1.34%), Wipro (-1.22%), Sun Pharma (-0.99%) and Hero MotoCorp (-0.95%).

Shares of ITC Ltd ended up 2.6 per cent, after hitting their highest since February 2015 earlier in the session, while Hindustan Unilever rose 3.25 per cent.

Both stocks, which were among the top gainers on the Nifty 50, accounted for nearly half of the gains on the index.

Tata Communications Ltd gained as much as 7.99 per cent after the company said it would sell its South-African fixed-line unit Neotel to Liquid Telecom Group.

Idea Cellular Ltd rose 4.78 per cent to its highest in over two weeks, after the company management reiterated confidence in its execution strategy and ability to gain market share, in an analyst meet on Monday.

Among the top losers, software services companies extended falls due to their hefty exposure to Europe.

Tata Consultancy Services fell over one per cent, after declining 6.44 per cent in the previous three sessions. Infosys Ltd was down 0.45 per cent, while HCL Technologies Ltd fell 2.9 per cent.

Monsoon rains

Hopes India will see above-average south-west monsoon rains after two years of drought have bolstered optimism about the domestic economy, helping offset some of the global volatility tied to Britain's vote to leave the European Union last week.

Stronger rains, besides benefiting the key rural sector, could also cool down food prices, raising the prospect that the Reserve Bank of India would be more willing to cut interest rates again later this year.

“The monsoon is progressing well, and that is something which is more positive for us,” said Neeraj Dewan, director at Quantum Securities Pvt Ltd.

“People are now waiting to see how things span out and progress in the UK to react further based on that news.”

Global markets

European shares rose for the first time in three days on Tuesday, attempting a recovery from the heavy sell-off in the previous two sessions after Britain's shock vote to leave the European Union.

The pan-European STOXX 600 index, which had slumped 11 per cent in the last two sessions.

A report by SMC Global said: " Asian stock markets opened lower today and pound took another tumble on Monday, falling to a fresh 31-year low against the dollar and extending losses to nearly 12 per cent from Brexit event. The momentum has maintained its downward mode because globally, there is lot of uncertainty. US market - US stocks ended deep lower and traded almost at 10-month low, as investors turned cautious and worried as tech, materials, financials and energy were the worst-performing sectors. In other asset classes, crude prices rebounded after slipping over 3 per cent overnight, while Brent is above 47 dollars per barrel. Gold prices trimmed gains but continued to trade near the two-year high.Eurozone money supply growth accelerated in May and the annual increase in loans to households improved, the European Central Bank said Monday.

The broad monetary aggregate M3 increased by faster-than-expected 4.9 per cent on a yearly basis, following a 4.6 per cent increase seen in April. It was expected to rise to 4.8 per cent. During three months to May, M3 growth averaged 4.8 per cent. The annual growth rate of loans to households came in at 1.6 per cent in May, compared with 1.5 per cent in April."

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