Reliance, rate-sensitive sectors lead Indian shares higher, RBI decision in focus

India’s benchmark indexes rose on Thursday, led by heavyweight Reliance Industries and rate-sensitive sectors such as financials and realty ahead of a widely expected policy rate cut by the central bank.

The Nifty 50 ended 0.53% higher at 24,750.90, while the Sensex gained 0.55% to 81,442.04.

Reliance Industries gained 1.3% after JPMorgan raised the target price while maintaining an “overweight” stock rating, citing earnings improvement over the next two years.

High-weightage private lender ICICI Bank rose 1.7%.

Ten of the 13 major sectors advanced on the day. The realty index gained 1.8% while financials rose 0.5%.

The broader, more domestically focussed smallcap and midcap stocks rose 1% and 0.7%, respectively.

The Reserve Bank of India is widely expected to cut key lending rates by 25 basis points for the third straight meeting on Friday.

Indian shares rise on optimism over trade negotiations, potential RBI rate cut

“With inflation well below the RBI’s 4% target and the growing need to support the economic growth, the market is rightly anticipating a rate cut on Friday,” said Pranay Aggarwal, director and CEO of discount brokerage firm Stoxkart.

“While a 25-basis-point cut seems most likely, there is also a case for a deeper 50 bps cut to further support credit growth and economic momentum,” Aggarwal said.

Dr Reddy’s Laboratories jumped 3.1% on partnership with biotech company Alvotech to develop cancer drug Keytruda’s biosimilar for global markets.

Eternal, parent of Blinkit and Zomato, jumped 4.4% after CLSA named it as one of its top India consumer picks, citing Blinkit’s lead in the quick-commerce segment by weekly average users.

Brokerage Angel One gained 4.6% after posting a 34% year-on-year jump in its client base in May.

Other Asian markets edged up on the day while European markets opened higher ahead of an expected European Central Bank interest rate cut, while focus was also on the ongoing trade negotiations between the U.S. and its key trading partners.