Banking stocks lead gains in anticipation of a rate cut

The Sensex and the Nifty rose, led by lenders, on growing expectations for a rate cut from the RBI during its mid-April meeting, while rising global equities are raising confidence foreign investors will continue to buy into the country's stocks.

Foreign investors bought a net of Rs 250 crore in Indian equities on Monday, the first session of the quarter, according to provisional National Stock Exchange data.

Looking ahead to the rest of the session, traders are particularly eyeing a Supreme Court ruling regarding petitions to review its February order revoking the 2G telecom licences granted in a scandal-tainted 2008 sale.

"Markets opened up in-line on global positive news. Going ahead, markets will take cues from the Supreme Court verdict in the 2G case," said Jigar Lodaya, assistant vice president of the advisory unit at brokerage Sharekhan.

State Bank of India rose 1.7%, while private sector lender ICICI Bank gained 1.5%. Banks account for nearly one-fourth of the weighting in Indian indexes.

The main 30-share BSE index and the 50-share Nifty index gained 0.7% each, heading for their third consecutive winning session.