By Bharath Rajeswaran and Dimpal Gulwani
BENGALURU – Indian shares recovered from a muted start on Thursday, helped by a rebound in financials on hopes of improvement in the country’s fiscal deficit after the Reserve Bank of India’s record dividend to the government.
The blue-chip NSE Nifty 50 was up 0.42% at 22,690.95 points, while the S&P BSE Sensex added 0.44% to 74,550.31, as of 10:38 a.m. IST.
India’s central bank approved a record surplus transfer of 2.11 trillion rupees to the government for fiscal 2024, well above the government’s projections.
It is likely to lead to a reduction in the country’s fiscal deficit, which is the biggest positive for markets today, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Financials, the heaviest-weighted, rebounded from a 0.82% drop in the last two sessions to rise 0.9%. State-owned lender climbed 2.2%.
Axis Bank and State Bank of India rose 2.5% and 2%, respectively, and were among the top three Nifty 50 gainers.
The higher dividend from the RBI will further improve the government’s cash position, which is a positive for banking stocks, according to two analysts.
Metal stocks dropped 1.5%, weighed by a strong U.S. dollar following hawkish Federal Reserve minutes. [MET/L]
Power Grid Corporation of India lost 3.6% after reporting a drop in March quarter profit.
Sun Pharma dropped 3.8% after the drug maker missed March quarter revenue estimates.
Several brokerages including HSBC and Phillip Capital cut target prices after the results. CLSA downgraded the stock to “underperform” from “buy”, citing near-term margin pressure and moderate guidance for fiscal 2025.
The drop in Sun Pharma weighed on the pharma index, which lost 1.5%
Power Grid and Sun Pharma were the top Nifty 50 losers.
(Reporting by Bharath Rajeswaran and Dimpal Gulwani in Bengaluru; Editing by Mrigank Dhaniwala and Janane Venkatraman)
