Sensex gains 1 percent; ITC leads

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex and Nifty rose for a third session on Monday, led by gains in defensive stocks such as ITC Ltd (ITC.NS) on worries the selling spree by foreign investors might continue till year-end, while higher Asian shares underpin the broader market.

Foreign investors sold nearly $1 billion worth of shares over nine consecutive sessions of selling, amid a brewing financial crisis in Russia and a crude oil slump, regulatory data show. They still remain net buyers of Indian equities worth $16.5 billion in 2014 so far.

Volatility may rise due to expiry of equity derivatives on Wednesday while progress on key reforms such as the opening up of insurance and coal sectors and tabling of a bill on nationwide sales tax in parliament's winter session that ends Tuesday, are key ahead of the budget in February.

Asian shares took their cues from Wall Street and kicked off a holiday-shortened week on a strong footing on Monday. MSCI's index of Asia-Pacific shares outside Japan extended gains and was up 1.1 percent.

"Value-buying by domestic investors is supporting the market on hopes the insurance bill and GST would go through during the winter session itself," said Deven Choksey, managing director at K R Choksey Securities.

The Nifty rose 0.22 percent to 8,242.80, while the benchmark Sensex gained 0.23 percent to 27,435.13, trading around their respective 50-day moving averages.

ITC rose 2.5 percent, Hindustan Unilever (HLL.NS) was up 1.9 percent while in utilities, NTPC (NTPC.NS) rose 2.8 percent and Gail India (GAIL.NS) rose 3.2 percent.

Select lenders such as State Bank of India also gained as Prime Minister Narendra Modi may consider using an executive order to push through laws overhauling the insurance and coal sectors.

(Editing by Biju Dwarakanath)