Shares of fertiliser, irrigation, seed and two-wheeler manufacturers rallied sharply today, a day after private weather forecaster Skymet predicted above average rains this year.
Half of the country's farmlands lack irrigation facilities and depend on monsoon rains.
A normal monsoon after two straight years of drought is likely to boost the farm sector, which has been weighed down by subdued agriculture output and falling farm income. Though agriculture accounts for just 14 per cent of India's $2 trillion economy, it supports two-thirds of the country's population.
Hopes of above average monsoon rains have given fresh wings to domestic stock markets. The BSE Sensex, which had rallied 350 points on Monday, rose over 100 points in morning trade, while the broader Nifty edged past the key 7,700 levels.
Jain Irrigation Systems shares traded 6 per cent higher, while Sharda Cropchem shares jumped 5 per cent. Monsanto India traded 4 per cent higher. Rallis India, Chambal Fertilisers, Kaveri Seeds were other stocks to witness buying interest.
Hero MotoCorp - India's biggest two-wheeler maker- traded 2 per cent higher, while tractor manufacturer Escorts jumped 6 per cent on hopes that above average monsoon rains will boost demand for these goods.
The state-run India Meteorological Department is expected to issue its forecast for this year's monsoon rains today.
(See: India banks on La Nina for normal monsoon)