Nifty, Sensex end higher as Reliance rallies; inflation data awaited

Indian shares ended higher on Monday, led by a rally in Reliance Industries, ahead of June’s inflation data which investors bet would lead to further interest rate cuts by the central bank.

However, gains were capped by declines in the banking and financial sectors after rating agency Moody’s warned of challenging economic and credit conditions stemming from Covid-19 for Indian banks.

The broader NSE Nifty 50 index ended up 0.32{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} at 10,802.7 and the benchmark S&P BSE Sensex finished 0.27{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} higher at 36,693.69.

A Reuters poll last week showed India’s headline inflation likely eased to 5.3{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} in June, still just over a point above the Reserve Bank of India’s medium-term target of 4.0{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}.

The data is expected later in the evening.

Expectations of easing inflation come amid surging coronavirus cases as Asia’s third-largest economy began lifting lockdown restrictions to help revive the economy.

Reliance Industries finished at record 1938.7 rupees after gaining as much as 3.7{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} in the session, its third consecutive day in the black, on Qualcomm’s 7.3 billion-rupee investment in the Indian conglomerate’s Jio Platmforms arm.

The Nifty IT index rose as much as 2.06{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} in the session, its highest since March 5, with Tech Mahindra advancing 5.46{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} and Infosys closing up 1.94{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}.

The Nifty banking index fell 1.38{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} and the financials index declined 1.54{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} at the closing bell.

The country’s biggest lender by assets, State Bank of India , closed down 1.48{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}, while large shadow lender HDFC Ltd finished 2.14{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} lower.

HDFC Bank closed down 2.25{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} after Bloomberg reported the lender probed allegations of improper lending practices and conflicts of interests in its vehicle-financing operation.