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Indian equity benchmarks made a comeback on Monday after four back-to-back sessions of losses. Gains in banking and financial services stocks were offset by losses in automobile, IT and consumer counters in a choppy session. Sharp gains in financial stocks, as investors cheered ICICI Bank's strong quarterly show, aided the bounceback on Dalal Street.
The Sensex index ended 145.4 points or 0.2 percent higher at 60,967.1 and the broader Nifty50 benchmark added 10.5 points (0.1 percent) to settle at 18,125.4, breaking a four-day losing streak.
Among blue-chip stocks, ICICI Bank, Axis Bank, ONGC, Tech Mahindra and JSW Steel -- closing with gains of between 0.9 percent and 11.5 percent -- were the top gainers.
On the other hand, BPCL, Bajaj Finserv, SBI Life, Bajaj Auto and Tata Motors -- down between 2.5 percent and 3.3 percent -- were the worst hit among the 39 laggards in the Nifty50 universe.
ICICI Bank, Axis Bank, SBI and Hindustan Unilever were the biggest contributors to the gain in the 30-scrip headline index.
"Banks' improved asset quality and business growth based on key Q2 earnings aided the banking sector to improve the overall market outlook leading to outperformance," said Vinod Nair, Head of Research at Geojit Financial Services.
The Nifty Bank index ended 2.2 percent higher at a record 41,192.4, in its best one-day performance since September 23. The banking basket was boosted by ICICI Bank shares, which clocked their biggest jump since February 1 after the lender's quarterly earnings beat Street estimates.
Ajit Mishra, VP-Research at Religare Broking, expects the banking pack to remain in focus as Axis Bank and Kotak Bank report their numbers on Tuesday.
Reliance Industries ended one percent lower at Rs 2,601.7 apiece on BSE, though having recovered more than half of intraday losses. Last Friday, the conglomerate reported a set of financial results for the July-September period that exceeded analysts' expectations.
In the broader market, midcap and smallcap gauges suffered sharp losses, denting investors' sentiment. The Nifty Midcap 100 and Smallcap 100 barometers settled 1.7 percent and 2.3 percent lower for the day respectively.
Oil India, City Union Bank, Polycab, Balaji Amines and KEC -- up 3.9-8.4 percent each -- were among the top gainers in the segments. On the other hand, IRCTC, IndiaMART, Coforge, Rail Vikas and IEX -- down between 6.2 percent and 12.8 percent -- were among the losers.
Around 120 scrips in the BSE 500 index -- the broadest barometer on the bourse -- managed to end higher for the day.
Overall market breadth was sharply negative, with 1,051 securities rising on BSE at the close and 2,309 moving lower.
Mishra warned that volatility is likely to continue in the overall market ahead of the expiry of monthly derivatives contracts, due on Thursday. "The Nifty index should hold 17,950 for any rebound, else profit taking would resume. Needless to say, the scheduled monthly expiry will keep the choppiness high across the board," he said.
Participants should remain cautious until there is a concrete sign of resumption of trend, Mishra added.
Meanwhile, European markets inched higher amid optimism on major quarterly earnings reports due this week. The pan-European Stoxx 600 index was up 0.1 percent at the last count. The United Kingdom's FTSE benchmark was up 0.6 percent. Earlier in the day, Asian markets were steady with MSCI's broadest index of Asia Pacific shares flat.