IT, financials boost Indian shares to weekly gains

Indian equities posted weekly gains on Friday, led by IT and financial shares, as signs of progress in talks between the U.S. and Iran to end the nearly three-month-long war supported market sentiment.

A senior Iranian source told Reuters that gaps with the U.S. have narrowed. However, the two sides remain at odds over Tehran’s uranium stockpile and controls on the Strait of Hormuz, the effective blockade of which has battered global markets.

India’s benchmark Nifty 50 rose 0.27% to 23,719.3 while the BSE Sensex gained 0.31% to 75,415.35. The indexes rose about 0.3% in the week but are still down 5.8% and 7.2%, respectively, since the war started.

The Nifty settled above its 50-day moving average for the first time in two weeks, signalling an improvement in sentiment.

India’s central bank stepped in to support the rupee that has been slumping to record lows. Some economists are projecting rate hikes next month to protect the currency.

Seven of the 16 major sectors logged weekly gains. The broader small-caps and mid-caps rose 0.4% and 1.4%.

“The rally is unlikely to sustain unless there is a diplomatic bilateral statement from Iran and U.S. regarding the peace talks, and crude oil prices decisively drop below $100 per barrel,” said Kranthi Bathini, director of equity strategy at Wealthmills Securities in Mumbai.

Brent crude dropped to about $105 a barrel from $110 a week ago. The contract is up about 45% since the war started.

Information technology stocks topped weekly gains with a 4.3% rise, taking a breather after a steep selloff earlier this year due to fears of AI-led disruption.

Financials rose 0.7%, led by 3.3% and 1.6% gains in Axis Bank and ICICI Bank.

Analysts said investors are switching between sectors as they weigh the ramifications of persistently elevated energy prices.

“Investors have bought IT stocks at lower levels this week, while large private banks rose today as investors believe they can weather inflationary and higher yield scenarios,” Bathini said.

Grasim Industries jumped 7.6%, recording its best week since June 2024 and hitting a record high, after posting 32% quarterly revenue growth.