The NSE Nifty 50 benchmark index rose to as high as 9,377.10 compared to its previous close of 9,154.40
Domestic share markets rose more than 2 per cent on Monday, powered by gains in banking and asset management company stocks after the central bank launched a special liquidity facility for mutual funds to ease the pressure due to the coronovirus pandemic. The S&P BSE Sensex index climbed as much as 2.48 per cent - or 776.48 points - to touch 32,103.70, having started the session up 331.82 points at 31,327.22. The broader NSE Nifty 50 benchmark rose to as high as 9,377.10, after opening at 9,259.70 compared to the previous close of 9,154.40. Gains across sectors - led by banking, automobile and pharmaceutical shares - pushed the markets higher.
The Reserve Bank of India said it would open a special liquidity facility for mutual funds of Rs 50,000 crore ($6.56 billion) to ease liquidity strain, reassuring investors after a prominent fund house last week said it would wind down six credit funds due to a lack of liquidity.
"After Franklin Templeton, there was a fear that people will panic and withdraw money from other funds, so RBI is helping mutual funds with extra liquidity. It is trying to avoid contagion," said Gaurav Dua, head of capital market strategy at Sharekhan.
"This is helping stocks of mutual funds and banks with stakes in asset management companies."
The Nifty Bank index extended gains to rise as much as 2.9 per cent after the announcement, while the Nifty Private Bank index jumped 3.1 per cent.
Private-sector lender Kotak Mahindra Bank was the biggest mover, rising as much as 6.9 per cent to a near four-week high.
Asset manager Nippon Life India Asset Management soared 12.7 per cent, while HDFC Asset Management Company jumped 7.9 per cent.
Domestic markets have also been buoyed by expectations of more stimulus from the government after an initial round worth about $22 billion, which included provision of free cooking gas cylinders, grains and some cash to the country's poor.
Even as the number of cases rose, the government allowed shops in residential areas to reopen from Saturday, more than a month after the country went into an extended lockdown to curb the spread of the virus. Total cases rose to 27,892 as on Monday morning, including 872 deaths.
Investor sentiment was also helped by gains in broader Asian markets as meetings of major central banks this week raised hopes of more measures to counter the fallout from the pandemic.
The Bank of Japan (BoJ) on Monday expanded monetary stimulus for the second straight month to ease corporate funding strains and finance huge government spending, while the Federal Reserve and the European Central Bank are due to meet later in the week.
In Mumbai trading, private-sector lender IndusInd Bank rose as much as 6.3 per cent ahead of its quarterly results due later in the day, while state-owned Bank of Baroda rose as much as 3.1 per cent after approving a fund raise of up to Rs 13,500 crore ($1.77 billion).
IT firm Mindtree surged nearly 10 per cent after reporting a better-than-expected profit for the March quarter.
($1 = Rs 76.1830)
