In the 50-share index, NTPC, Vedanta, BPCL, Hindalco and Tata Steel gained between 3.40 per cent and 5.50 per cent. On the other hand, Cairn India, Idea Cellular, Bajaj Auto, Maruti Suzuki and TCS slid between 0.50 per cent and 1.61 per cent.

Among the sectoral indices on the Bombay Stock Exchange (BSE), the BSE Metal index gained the most — 2.7 per cent at 7,392.64, it was followed by the BSE Power index (up 2.5 per cent at 1,830.47), BSE Bankex (up 1.88 per cent at 19,352.04) and BSE Realty index (up 1.62 per cent at 1,309.70). The BSE Consumer Durables index remained the only loser and declined 0.13 per cent at 10,486.82.

Alex Mathews, head research, Geojit BNP Paribas Financial Services, said, “Domestic equity markets moved up mainly because of low wholesale inflation data and expectation of a possible rate cut by RBI. Some of the investors were cutting their long and short positions ahead of US Fed meeting also helped the market.”

Investors are also keenly awaiting retail inflation data that will be released later on Monday. Slowing retail inflation would provide the Reserve Bank of India (RBI) wiggle room to cut interest rates, a move that companies say is essential to jump-start growth.

India’s wholesale prices fell for a tenth straight month in August, tumbling an annual 4.95 percent primarily on the back of a sharp cooling in fuel costs, government data showed on Monday.

Shares of Amtek Auto were in the limelight on Monday as the stock was up by 24 per cent over Friday’s closing. After rising around 80 per cent on Friday, the shares of Amtek Auto continued to rally today after market reports that the company is advanced talks to raise Rs 6,500 crores by selling assets to repay company’s debts. Satya Prakash Goel​, director, Bonanza Portfolio, said, “​​The move, if turns out to be reality, would instill confidence in investors with respect to financial health of stock and would curb speculation in the stock.”

Foreign institutional investors (FIIs) were net sellers in the cash market segment on Friday, sold shares worth Rs 754.27 crore. But DIIs remained net buyers, bought shares worth Rs 411.43 crore in the capital markets segment.

Asian peers, Shanghai and Nikkei closed 2.67 per cent and 1.63 per cent lower at 3,114.80 and 17,965, respectively. Hang Seng closed 0.27 per cent up at 21,561.90.