Nifty, Sensex Rise As Banks Rally, Inflation Eases Sharply
The broader NSE Nifty was 0.66 per cent higher at 10,808.85 in early trade, while the benchmark BSE Sensex was up 0.67 per cent firmer at 36,018.86.
Indian shares climbed to a more than one-week high today after inflation eased sharply in November, and the new central bank governor's move to open up a dialogue with lenders pushed up banking counters.
The broader NSE Nifty was 0.66 per cent higher at 10,808.85 by 0459 GMT, while the benchmark BSE Sensex was up 0.67 per cent firmer at 36,018.86.
India's retail inflation rate, which includes food and energy prices, fell to 2.33 per cent on an annual basis in November, remaining below the Reserve Bank of India's (RBI) medium-term target of 4 per cent for a fourth straight month.
The drop in inflation should increase the chances of new RBI Governor Shaktikanta Das keeping interest rates on hold at his first policy meeting next month. Das yesterday also said he will meet heads of state-run lenders to address problems facing the banking sector.
"There is a new ray of hope that resolutions, especially on the front of capitalisation for banks that are starved of funds, may be found with Das in the RBI," said Anita Gandhi, whole-time director at Arihant Capital Markets, Mumbai.
The outcome of Das' meeting with banks will decide whether the rise in banking stocks will be sustained on Thursday, Gandhi added. Financial stocks accounted for the biggest share of gains on the NSE index. The NIFTY PSU bank Index rose for the third straight session, climbing 2.8 percent to its highest since Nov. 19.
The stock of country's largest lender, State Bank of India, rose as much as 3.1 per cent to its highest since Nov. 6, and was among the biggest boosts to the NSE index. HDFC Bank Ltd's scrip advanced 1.9 per cent.
Yes Bank Ltd's stock rallied as much as 3.5 per cent ahead of a board meeting where it will recommend names for a new chairman for approval by the RBI.
Meanwhile, shares of Sun Pharmaceutical Industries Ltd dropped 3.1 percent after India's market regulator, late on Wednesday, said it was examining a whistleblower complaint against the country's largest drugmaker.
A 1.1 per cent fall in IT giant Tata Consultancy Services Ltd's stock also limited the broader market's advance.