Bank stocks lift Indian shares ahead of loan moratorium hearing

BENGALURU: Indian shares reversed early losses to end higher on Wednesday after bank stocks rose sharply ahead of a court hearing on waiving interest on loans under moratorium due later in the day.

The NSE Nifty 50 index closed up 0.31pc at 11,971.05, while the S&P BSE Sensex closed 0.42pc higher at 40,794.74. Both indexes have now risen for ten straight sessions.

The Nifty Bank index, which slid as much as 1.5pc earlier in the day, erased losses to end 1.63pc higher ahead of a hearing at India's top court on waiving interest on loans under moratorium.

Banks are hoping that borrowers will not be given further respite beyond the waiver on compound interest for loans up to 20 million rupees for six months, which the government has agreed to pay.

Top private lender HDFC Bank ended 1.26pc higher, while IndusInd Bank rose 2.4pc.

Meanwhile, the International Monetary Fund cut its forecast for India's gross domestic product growth, which fell at its steepest pace of 23.9pc in the June-quarter.

It now expects Asia's third-largest economy to contract 10.3pc for the fiscal year.

India's wholesale price index inflation rose to 1.32pc in September against 0.16pc in August, according to government data.

Wipro Ltd's shares fell as much as 6.9pc, the top percentage loser on the Nifty 50, after the company reported a quarterly profit that missed market estimates.

Shares of IT heavyweight Infosys Ltd ended 1.8pc lower ahead of its quarterly results later in the day.

The Nifty IT index which has risen 43.7pc this year as of Tuesday's close, ended 1.28pc lower on Wednesday.

"To justify their valuations, they (IT companies) will have to show good top-line growth," said Anita Gandhi, director at Arihant Capital Markets.