Indian shares closed at their highest in nearly three months on Wednesday, as financial stocks continued to rally on the back of quarterly results, while sentiment was aided by optimism ahead of the federal budget. The broader NSE index closed up 1.50 percent at 8,602.75, while the benchmark BSE index ended 1.21 percent higher at 27,708.14.
Both indexes closed their highest since November 1, 2016 and recorded their biggest single-day percentage gain since December 27, 2016. Indian financial markets will be closed on Thursday for a public holiday. Still, analysts expect India's annual budget, due on February 1, to provide incentives to some sectors to help support economic growth.
"Markets are generally getting excited about results declared by some finance companies as the numbers have not shown any major impact of demagnetisation," said Dipen Shah, senior vice president, public client group research, Kotak Securities.
Financials contributed to a majority of the gains on the NSE index, led by a 3 percent rise in Housing Development Finance Corp. Indian Overseas Bank and Bharat Financial Inclusion Ltd rose as much as 5.71 percent and 7.82 percent, respectively, after reporting results late on Tuesday.
Shares of Kotak Mahindra Bank Ltd, IDFC Bank Ltd and Indian Bank Ltd were up more than 1.50 percent each ahead of quarterly results later in the day. Biocon Ltd rose as much as 5.21 percent to its highest since January 12 after posting a 65 percent jump in third-quarter consolidated profit on Tuesday. Among decliners, Bharti Airtel Ld fell as much as 3.63 percent after the company on Tuesday reported its lowest profit in four years.
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