Indian shares rose for a third straight session on Wednesday, boosted by banks and as investors shrugged off global trade war jitters to focus on supportive local factors.
The Nifty 50 rose 0.47% to 23,437.20, while the BSE Sensex gained 0.4% to 77,044.29.
The Nifty has risen 4.6% in three sessions, fuelled by U.S. President Donald Trump’s exemptions from tariffs, the forecast of an above-average monsoon, and prospects of more interest rate cuts in India.
“The stars are now aligning for a strong rally for India. Earnings estimates are bottoming out and we expect the downgrade cycle to arrest. Valuations have also corrected,” said Jaykrishna Gandhi, head of business development for institutional equities at Emkay Global Financial Services.
Eleven of the 13 major sectors rose on the day, while the broader midcaps and smallcaps advanced 0.7% and 1.1%, respectively.
Heavyweight bank stocks jumped 1.4% on prospects of further rate cuts after retail inflation fell to over five-year low.
India’s Sensex erases post-tariff losses as Trump signals exemptions
“Banks have seen strong growth in advances and the Reserve Bank of India has been accommodative. On top of this, there has not been any major asset quality problems this financial year,” said Dharmesh Kant, head of equity research at Cholamandalam Securities.
IndusInd Bank jumped 7.1% after the private lender projected a smaller-than-expected hit from an accounting lapse.
Peer Axis Bank soared 4.4% and was the biggest contributor to the Nifty’s gains, while the country’s largest lender, State Bank of India, rose 1.1%.
Kotak Institutional Equities said Axis Bank and SBI are best-positioned stocks as the market’s fears of asset quality deterioration are unlikely to materialise.
Meanwhile, auto and pharma stocks fell 0.4% and 0.2%, respectively, limiting gains for the benchmarks.
Drugmakers Lupin and Zydus Lifesciences slid 4% and 7%, respectively, on losing patent litigation for a bladder disorder drug in a U.S. court.
American Dollar Exchange Rate