Indian equities opened higher on Tuesday, led by a sharp rally in IT stocks after better-than-expected HCLTech earnings, while RBI support for the rupee also improved market sentiment.
Mumbai, October 13 — Indian benchmark indices moved higher in early trade on Tuesday, with gains in information technology stocks helping offset concerns over rising inflation and the possibility of further interest rate hikes. The Nifty 50 and BSE Sensex were both up around 0.9%, at 22,562.1 and 72,564.62, respectively, as of 10:16 a.m. IST.
The rally was led by the IT sector, with the Nifty IT index gaining 3.4%. HCLTech shares jumped 5.4% after the company reported strong quarterly results and better profitability metrics. Tata Consultancy Services also gained 5.4%, extending the recovery in beaten-down technology stocks.
Market sentiment was also supported by the Indian rupee, which extended its recovery to around 95.25 per US dollar after the Reserve Bank of India announced additional measures aimed at reducing pressure on the currency.
Despite the gains, investors remained cautious over the interest-rate outlook. India’s retail inflation accelerated to 5.54% in September, higher than expected, strengthening concerns that the RBI may have to maintain a tighter monetary stance.
Oil prices also remained a concern. Although Brent crude futures fell more than 1% during the session, prices have stayed above $100 per barrel, adding to inflation worries, especially amid a weak monsoon.
Broader market performance was mixed. Fourteen of the 16 major sectoral indices were trading higher, while the small-cap index slipped 0.7% after gaining 1.4% in the previous session. The mid-cap index rose 0.4%.
Among individual stocks, Bandhan Bank surged 7.7% after a report said Abu Dhabi funds were in early-stage discussions to buy a stake in promoter Bandhan Financial Services.
The strong start suggests that upbeat IT earnings and RBI support for the rupee are currently outweighing concerns over inflation, high crude prices and the possibility of tighter monetary policy.
