Markets register modest gains amid cautious trade

The Nifty rose modestly on Monday to notch its fourth consecutive session of gains, led by blue-chips that have under-performed recently such as Tata Motors and Oil and Natural Gas Corp, although the mood was broadly cautious.

Shares could be vulnerable ahead of the expiry of monthly derivatives contract on Thursday, while Asian shares skidded as investors awaited the preliminary reading of a private survey of manufacturing in China due on Tuesday.

Investors are also expected to remain cautious ahead of the Reserve Bank of India's policy review on September 30. Although the central bank is widely expected to keep interest rates unchanged, markets will focus on the tone of its statement.

"We are in a bull market and buyers are still emerging on every levels. However, you have to remain cautious about valuation and the risk, as markets are near record highs," said Daljeet S Kohli, head of research at IndiaNivesh.

The benchmark BSE Sensex closed up 116.32 points, or 0.43 per cent, at 27,206.74, after ending down 0.08 per cent on Friday.

The broader Nifty ended 24.85 points higher at 8,146.30.

Recent under-performers led the gains, with Tata Motors jumping as much as 4.1 per cent to a record high of Rs 542.50. Shares in the automaker were down 1.2 per cent so far this month as of Friday's close, compared with a 2.1 per cent gain in the Nifty.

Oil and Natural Gas Corp added 3.74 per cent after falling 11.24 per cent in the past two weeks.