Indian shares log meagre gains led by consumer stocks; financials weigh

BENGALURU: Indian shares ended Wednesday with small gains led by consumer stocks, while a drop in financials weighed on benchmark indexes.

The NSE Nifty 50 index rose 0.29% to 24,770.2, and the S&P BSE Sensex added 0.13% to 80,905.3.

The indexes have gained about 2.5% each in five sessions.

Other Asian markets paused after a recent rally, triggered by hopes of an imminent rate cut by the U.S. Federal Reserve.

Investors await the minutes of the latest Fed policy meeting later in the day and Chair Jerome Powell’s address later this week for clues into the rate cut trajectory.

“While a U.S. rate cut in September would stabilise global markets after volatile moves in August so far, we continue to remain constructive on domestic equities, as the risks over the domestic macro front are benign,” said Anil Rego, founder and fund manager at Right Horizons

“Shocks are skewed towards exogenous factors,” Rego added.

Financials, IT lead rise in Indian shares

On the day, six of the 13 major domestic sectors logged losses. The highest weighted financials fell 0.15%, while banks shed 0.23%.

The Reserve Bank of India’s chief urged banks to monitor credit-deposit gap to avoid liquidity issues, post market hours on Tuesday.

“Banks could face significant liquidity risks due to widening credit-deposit gap, driven by households shifting their savings to higher-yielding financial instruments,” said Tusharika Aggarwal of S&P Global Market Intelligence.

The broader, more domestically focussed small- and mid-caps rose 1.21% and 0.34%, respectively.

Consumer index added 1.37% to hit a record high and was the top sectoral gainer by percentage.

Healthy monsoon, expectations of improvement in earnings due to pickup in rural demand have driven investor sentiment towards consumer stocks, two analysts said.

Varun Beverages rose 3.65% after BofA Securities termed it the preferred pick in the space due to its healthy earnings momentum.

Divi’s Laboratories added 3.76% on report of favourable U.S. court ruling on top drug.