Indian shares rise for third session; gains capped by record-low rupee

Indian shares rose for the third straight session on Thursday as upbeat commentary in the government’s economic survey lifted sentiment ahead of the federal budget, though gains were capped by the rupee hitting another record low.

The Nifty 50 rose 0.3% to 25,418.90, while the BSE Sensex added 0.27% to 82,566.37. The benchmarks bounced back after falling about 0.8% earlier in the session.

The broader small-caps and mid-caps rose 0.2% each.

The survey projected India’s economy to grow between 6.8% and 7.2% in the fiscal year starting in April on the back of strong domestic demand.

Although the forecast will mean a slowdown from this fiscal year’s 7.4% projection, Finance Minister Nirmala Sitharaman  said the outlook “is one of steady growth amid global uncertainty, requiring caution, but not pessimism.”

“The FY2027 growth outlook reflects a realistic assessment of India’s cyclical momentum, balancing U.S. trade and geopolitical uncertainty with the economy’s relative insulation due to domestic demand and steady capex,” said Sonam Srivastava, founder and fund manager at Wright Research PMS.

“The survey’s emphasis on sustained credit growth leaves banks and non-bank lenders well-positioned for growth, led by retail, MSME and infrastructure-linked lending,” Srivastava said.

Heavyweight financials, which were in the red before the release of the survey, closed 0.6% higher, while private banks gained 1%.

Benchmark gains were also capped by a 0.8% drop in the IT index after the U.S. Federal Reserve held rates, as expected.

Higher U.S. rates make emerging markets, including India, less attractive to foreign investors as they support the U.S. dollar and Treasury yields.

“The ambiguity over the India-U.S. trade deal and foreign outflows have significantly affected the rupee and weighed on equity markets,” said Mitesh Dalal, head of broking at Sanctum Wealth.

FPIs have offloaded Indian shares worth $4.56 billion in January so far, after record $19 billion outflows in 2025.

Among individual stocks, India’s top carmaker Maruti Suzuki dropped 2.5% on missing quarterly profit expectations.

Larsen & Toubro jumped 3.7% as brokerages reiterated their constructive view on long-term earnings growth despite a quarterly profit miss.