India equity benchmarks log third monthly gain, GDP data on tap

India’s stock benchmarks notched their third straight monthly gain on Friday driven by improving earnings, expectations of domestic and U.S. rate cuts and eased valuations, and ended near record highs ahead of the economic growth data.

The Nifty 50 ended 0.05% lower at 26,202.95 and Sensex lost 0.02% to 85,706.67.

Both benchmarks hit all-time highs on Thursday after 14 months. They rose about 2% each in November, gaining about 7.3% over three months.

“The recent breakout after a long consolidation reflects strengthening earnings, demand tailwinds from tax cuts, supportive monetary policy, benign inflation and steady economic growth,” said Amnish Aggarwal, analyst at PL Capital.

India’s economy likely stayed resilient in the July-September quarter, with GDP growth estimated at 7.3% year-on-year, driven by robust demand, according to a Reuters poll. The data is due after market hours on Friday.

Eleven of the 16 major sectors logged monthly gains. The information technology index rose 4.7%, buoyed by firming bets of a December rate cut by the Federal Reserve that could spur client spending in the U.S., the sector’s largest market.

Heavyweight financials, banks, private lenders and state-owned banks

climbed between 2.6% and 4% in November, on improving earnings and prospects of an imminent rate cut by the Reserve Bank of India, which could ease funding costs and boost credit growth.

Autos gained 3.6%, led by a 7.8% jump in Mahindra and Mahindra on strong earnings, upbeat demand and new launches.

While benchmarks have scaled fresh record highs, the rally remained constrained due to uncertainty over a trade deal with the United States.

The broader small-caps fell 3% and the mid-caps added 2% in November.

Among stocks, Asian Paints posted its best month since July 2022, rising 14.5% in November, fuelled by higher weightage in a key global index, demand recovery and upbeat results.

Oil-to-telecom conglomerate Reliance Industries gained 5.5% on an improving earnings outlook across all its core segments.