Indian shares edge higher as financials lead; U.S.-Iran tensions cap gains

Indian shares edged higher on Wednesday, led by financial stocks ahead of key earnings, though gains were capped by escalating U.S.-Iran tensions and rising crude oil prices.

The benchmark Nifty 50 rose 0.11% to 24,078.50, while the BSE Sensex added 0.17% to 77,185.43.

They had risen about 0.8% during the session.

Brent crude climbed 1% to $85.5 a barrel as the U.S. and Iran exchanged fresh strikes and battled for control of the Strait of Hormuz.

Meanwhile, softer-than-expected U.S. inflation in June lifted market sentiment, propelling Asian and European equities higher as investors bet on a less aggressive Federal Reserve.

However, the inflation relief was driven largely by lower oil prices following the ceasefire, a fragile support that now looks increasingly at risk, said two analysts.

“Indian markets are delicately poised, with a host of moving parts set to influence the next leg of the trend,” said Amnish Aggarwal, co-head of institutional equities at PL Capital.

“While India’s broader economic growth story remains firmly intact, a decisive breakout is likely only if the monsoon deficit narrows and tensions around the Iran conflict ease,” Aggarwal said.

Eleven of the 16 major sectors gained. Small-caps and mid-caps rose 0.7% and 0.3%, respectively.

Financials rose 0.6% after losing 1.1% in the previous session.

Banks and private lenders rose 0.5% and 0.3%, respectively, while state-owned banks added 1%.

ICICI Prudential Life jumped 3.8% after posting a June quarter profit rise.

HDFC Life gained 2.4%, and ICICI Lombard and HDB Financial added 1.5% each. The three firms are scheduled to report first-quarter earnings later in the day.

IT index fell 0.7% after global technology firm and bellwether IBM Corp forecast second-quarter revenue below analyst estimates.

Tata Elxsi fell 4.8% after multiple brokerages cut fiscal 2027 earnings estimates after June-quarter results, citing margin worries.