BSE Sensex closes near one-month high

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose on Monday to its highest close in nearly a month as stocks of companies such as Tata Steel gained after promising manufacturing data at home and in China eased concerns about slowing economic growth.

An HSBC survey showed on Monday that manufacturing returned to growth last month as a strong rise in orders pushed factories to step up production.

The report came after data on Friday showed India's economy grew more than expected in the July-September quarter, sparking hopes that economic growth may have bottomed.

Traders say the U.S. nonfarm payrolls data on Friday and the outcome of elections in several states on December 8 would be key for the short term.

"The Street fears that if the data comes as per expectations, the Fed will signal an unwinding of its $85 billion bond-buying programme, which boosted the global markets so far," said Jyotheesh Kumar, executive vice-president of HDFC Securities.

The outcome of state elections would also be important to validate traders' expectations of a clear winner, Kumar added.

The Sensex rose 0.51 percent, or 106.08 points, to end at 20,898.01, marking its highest close since November 5.

The Nifty rose 0.68 percent, or 41.75 points, to end at 6,217.85, marking its third consecutive day of gains. It closed above the psychologically important 6,200 level.

Steel shares gained, with Tata Steel up 1.9 percent and Jindal Steel and Power rising 4 percent, benefiting after China's factory activity maintained steady growth momentum in November.

Financial shares gained, with IDFC rising 2.7 percent on expectations it would get a banking licence.

Axis Bank gained 3 percent ahead of inclusion in the Sensex on December 23.

Larsen and Toubro rose 2.3 percent after the company said on Friday it was evaluating options "for monetisation" of assets belonging to its unit L&T Infrastructure Development Projects Ltd.

Indian Oil Corp gained 1.2 percent after the company said on Saturday it would raise retail prices of diesel by 1 percent, or 0.57 rupees, from Sunday in line with a plan to gradually align them with international prices.

Hindustan Petroleum Corp rose 1 percent, while Bharat Petroleum Corp gained 1.6 percent each.

Among stocks that fell, Power Grid Corp of India shares fell 1.6 percent. The company said on Friday the price band for its follow-on offer was fixed at 85 rupees to 90 rupees per share, a discount to its current market price of 93.65 rupees.

(Editing by Prateek Chatterjee)