Banks and tech stocks pull Indian stocks higher ahead of Cenbank decision

A man walks past the Bombay Stock Exchange (BSE) building in Mumbai, India October 4, 2018. REUTERS/Francis Mascarenhas

BENGALURU, Feb 9 (Reuters) – Indian stocks rose on Wednesday, lifted by technology and banking stocks which followed an overnight rally on Wall Street as investors awaited the Reserve Bank of India’s monetary policy decision.

The blue-chip NSE Nifty 50 index (.NSEI) rose 0.82% to 17,408.1 at 0455 GMT, while the S&P BSE Sensex (.BSESN) gained 0.83% to 58,286.56 .

India’s central bank is expected to keep its repo rate steady on Thursday, but raise its reverse repo rate as part of a process to reduce the excess liquidity poured into the markets at the start of the pandemic. Read more

Asian peers also rose as tech stocks trailed Wall Street higher, ahead of a key inflation reading this week.

“It looks like Wall Street has come to terms with the fact that interest rates are going to rise, and that has seeped into domestic markets,” said Aishvarya Dadheech, fund manager at Ambit Asset Management in Mumbai.

“In India, I think the volatility is here to stay for at least two more months before we see clear skies, with policy rate decisions and elections coming up.”

Blue chip indices were slightly lower in the month at the last close, shaken by foreign outflows. For the year, they are down more than 0.5% each.

The Nifty IT index (.NIFTYIT) climbed 1.5% in early trading.

Rate-sensitive bank stocks (.NSEBANK) rose 1.3%, boosted by a 1.8% rise in heavy private sector lender HDFC Bank (HDBK.NS).

In contrast, steel producer Jindal Steel and Power (JNSP.NS) fell 5% after reporting a lower-than-expected profit. However, National Aluminum (NALU.NS) and Hindustan Copper (HCPR.NS) gains on metal price strength pushed the Nifty Metal Index (.NIFTYMET) up 1.1%.

Edible oils refiner Adani Wilmar (ADAW.NS) extended its listing gains, jumping more than 17%.

Apple products retailer Redington (India) (REDI.NS) jumped 6.1% after doubling its quarterly profit.

Transmission company Power Grid Corp (PGRD.NS) traded down 0.4% ahead of its quarterly results.

Reporting by Chris Thomas in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich

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