Financials aid rise in Indian shares; Adani stocks cap gains

Indian shares rose on Friday, aided by rise in financials and optimism that the rate hike cycle may be near its end after global central banks hinted at inflation easing, while the ongoing rout in Adani group stock capped gains.

The Nifty 50 index NIFTY rose 0.14% to 17,634.10, while the S&P BSE Sensex SENSEX climbed 0.42% to 60,197.12, as of 10:50 a.m. IST.

High weightage financials CNXFINANCE rose nearly 1% ahead of earnings of the country's largest lender State Bank of India SBIN and after clarification from life insurers SBI Life SBILIFE and HDFC Life HDFCLIFE, addressing investor concerns regarding the latest budget proposals.

"Financials are likely to outperform the benchmarks, due to strong fundamentals and SBI is expected to deliver strong Q3 numbers," said Narendra Solanki, head of equity research at Anand Rathi Shares & Stock Brokers.

The clarification from life insurance companies has averted a knee-jerk reaction in the markets due to the budgetary announcement, Solanki added.

Insurance stocks declined over the previous two sessions after the budget proposed taxing returns upon maturity of life insurance policy with aggregate premium above 500,000 rupees a year.

SBI Life and HDFC Life, on Thursday, said the impact due to the budgetary proposal would be insignificant.

Nineteen of the Nifty 50 stocks rose with Titan TITAN, IndusInd Bank INDUSINDBK, Bajaj Finance BAJFINANCE, HDFC Bank and SBI Life among the top gainers.

Adani stocks declined, extending the ongoing selloff in the conglomerate's stocks which has caused a rout of over $100 billion in market capitalisation after the Hindenburg report on Jan. 24, keeping a lid on the upbeat mood.

Adani Enterprises ADANIENT and Adani Ports ADANIPORTS were the top losers on Nifty 50 index. The Adani saga could continue to hurt the sentiment in the market, three analysts said.

The rise in domestic equities is also spurred by dovish comments from global centrals banks over the last two sessions.

The Reserve Bank of India is expected to raise the key policy repo rate by 25 bps at its policy meeting on Feb. 8, beginning the end of almost a year-long tightening cycle.

($1 = 82.0940 Indian rupees)