Nifty, Sensex increase led by oil distributors; HPCL among the biggest winners

(Reuters) – Indian equities rose on Monday against a backdrop of volatile trading after three rounds of declines driven by gains from oil-trading companies such as Reliance Industries Ltd, while non-bank financial companies continued to struggle to the tension.

Petroleum marketing companies advanced, with the Nifty Energy index gaining up to 3.2% – its largest percentage gain since July 12th. Hindustan Petroluem Corp. Ltd. and Indian Oil Corp. (IOC) were the main winners of the Nifty NSE. 9.4% and 6.5%, respectively.

The heavyweight in the market, Reliance Industries, climbed 5.8%, its largest daily percentage gain since February 27, 2017. It also remained the largest contributor to the index.

India on Saturday sought assurances from investors that the government would not return to regulating fuel prices after oil companies' stocks fell following fears of a return to a regime that has already detracted to their profits.

The announcement was made after the government announced Thursday that it was reducing gasoline and diesel by 2.50 rupees per liter to help Indians who are struggling to pay the price for the price. Gasoline that had climbed due to rising world crude prices and the weakening of the rupee.

The IOC president also said Monday at a conference in New Delhi that fuel prices continued to be deregulated, soothing investor sentiment.

The Reserve Bank of India kept interest rates unchanged in its monetary policy review on Friday, which brought the rupee to a record high and surprising analysts who were expecting a rise in rates to counter inflationary pressures resulting from the weakness of the currency and high oil prices.

"The prices of metals in global stock markets are falling, which has resulted in a fall in metal stocks … It seems that the regulator wants more stringent regulation for non-bank financial services companies," said Siddhartha Khemka , head of retail research at Motilal Oswal Securities.

The broad NSE Nifty was up 0.37% at 10,354.30 at 05:56 GMT, while the BSE Sensex benchmark was 0.33% at 34,491.73.

Shares of Yes Bank Ltd increased by more than 5% after private sector lender Friday released details of its search and selection committee to find new CEO, after central bank collapsed the term of office of Rana Kapoor.

Shares of non-bank financial services companies plummeted, after the central bank announced Friday the strengthening of guidelines for these companies to avoid risks of turnover.

The shares of IIFL Holdings Ltd, Edelweiss Financial Services, JM Financial Ltd and Dewan Housing Finance Corp lost more than 6% each.

The Nifty Metal index lost up to 3.9%, with shares of Vedanta Ltd and Hindalco Industries each yielding 3%.