Indian shares gain as upbeat pre-earnings updates lift sentiment

Indian shares rose in early trade on Tuesday, supported by upbeat pre-earnings updates from companies and lending reforms by the Reserve Bank of India (RBI) that lifted market sentiment.

The Nifty 50 rose 0.38% to 25,173.95, while the BSE Sensex added 0.41% to 82,125.81 as of 9:53 a.m. IST.

Thirteen of the 16 major sectors advanced.

The broader mid-caps and small-caps gained 0.4% and 0.6%, respectively.

The benchmark indexes have each gained about 1.9% over the past three sessions, led by financials, while IT stocks rose on Monday ahead of their quarterly earnings starting this week.

“The market undertone remains positive as there are expectations of revival in demand driven by consumption tax cuts and RBI’s CRR cuts,” said Aamar Deo Singh, senior vice president at Angel One.

Financials rose 0.5%, looking to extend their winning streak to a sixth straight session, buoyed by strong loan growth in the September quarter and optimism following the RBI’s move to lending norms for capital markets and large companies.

Bajaj Finance was the top gainer, rising 1.5%, after posting a strong pre-quarterly update over the weekend.

The non-bank lender climbed about 2% on Monday.

Metropolis Healthcare added 2%, while Bank of India gained as much as 2.7%, both reacting positively to their quarterly business updates.

Bucking the trend, retailer Trent fell 2% as revenue growth continued to slow in the September-quarter, partly due to weaker same-store sales.

Investors are closely watching the primary market, with two large issuances - Tata Capital and LG Electronics India - open for subscription this week.

“While there could be some selling in the secondary market due to the large IPO issuances, we do not expect the impact to be material for now,” Singh said.