Indian Stocks Extend Rebound

Indian equities closed sharply higher on Tuesday, extending the rebound from Friday's two-year low with fresh support from banks and industrials ahead of the Reserve Bank of India's rate decision tomorrow. The S&P BSE Sensex rose 1% to 73,068 and the NSE Nifty 50 added 1% to 22,776. Kotak Mahindra Bank and Axis Bank rose 3.6% and 2%, respectively, to set the pace for financial companies amid a brief pause in global sovereign bonds following last week's selloff. The sector has come under pressure recently as soaring debt levels and high interest rates hamper the outlook for corporate credit activity in India. Consistently, the RBI is expected to deliver a 25bps rate hike tomorrow. Meanwhile, Trent surged 12% after the apparel retailer projected a 23% year-on-year increase in standalone revenue for the September quarter. On the other hand, tech shares recorded losses.

The SENSEX Index rose 561 points or 0.78 percent on Tuesday to close at 72944 points. Leading the gains are Kotak Mahindra Bank (3.59%), Nestle India (3.19%) and Hindustan Unilever (2.83%). Top losers were Tech Mahindra (-2.38%), ITC (-1.32%) and Infosys (-1.12%).

India’s BSE Sensex rose about 0.3% to 72,606 on Tuesday, extending gains for a second day as banks and financial stocks advanced on upbeat quarterly updates, while investors awaited the Reserve Bank of India’s policy decision, with a 25-basis-point rate hike widely expected. Banking stocks led gains, with Kotak Mahindra Bank gained about 3.5% after reporting 24.7% year-on-year growth in net advances, while Axis Bank rose around 1.5% on a 20.7% increase in deposits and 22.7% growth in gross advances. Meanwhile, Trent surged about 9.3% after the apparel retailer projected a 23% year-on-year increase in standalone revenue for the September quarter. Sentiment was also supported by lower oil prices and reduced expectations of aggressive US monetary tightening following weaker US jobs data. However, the rupee remained under pressure as higher US Treasury yields and a stronger dollar weighed on the currency, with the Reserve Bank of India intervening to slow its decline.