Indian shares gained on Wednesday, led by a rebound in financials as June quarter earnings get underway, with softer-than-expected U.S. inflation data easing near-term rate-hike concerns and lifting sentiment across Asian markets.
Concerns over escalating U.S.-Iran tensions, however, limited some gains, with the two countries exchanging strikes and battling for control of the Strait of Hormuz. Brent crude climbed 1.1% to $85.7 a barrel.
The benchmark Nifty 50 (.NSEI) rose 0.62% to 24,200.20, while the BSE Sensex (.BSESN) added 0.67% to 77,575.45 by 10:18 a.m. IST.
Thirteen of the 16 major sectors gained. The broader small-caps (.NIFSMCP100) and mid-caps (.NIFMDCP100) rose 1.2% and 0.5%, respectively.
Financials (.NIFTYFIN) gained 1.3% after losing 1.1% in the previous session. Banks (.NSEBANK) and private lenders (.NIFPVTBNK) rose 1.1% each and state-owned banks (.NIFTYPSU) added 1.3%.
HDFC Life (HDFL.NS) gained 2.2%, ICICI Prudential Life (ICIR.NS) rose 1.5%, and ICICI Lombard (ICIL.NS) and HDB Financial (HDBF.NS) added 1.2% and 1.7%, respectively, ahead of their June quarter earnings later in the day.
"Improving balance sheets, better liquidity conditions, stable interest rates and moderating credit costs are expected to support stronger growth and mark the beginning of a broad-based earnings upside for financials sector," said Siddhartha Khemka, head of research of wealth management at Motilal Financial Services.
IT index (.NIFTYIT) fell 0.2% after global technology firm and bellwether IBM Corp (IBM.N) forecast second-quarter revenue below analyst estimates.
Softer-than-expected U.S. inflation in May lifted Wall Street and Asian equities, cushioning risk sentiment.
Softer U.S. inflation has strengthened expectations of a less aggressive Federal Reserve, offering relief to global risk assets despite heightened geopolitical risks, said two analysts.
Among individual stocks, KEC International (KECL.NS) gained 4.6% after securing orders worth 11.8 billion rupees ($122.71 million).
Ather Energy (ATHR.NS) jumped 7% after two-wheeler maker Hero MotoCorp (HROM.NS) approved an investment of up to 10 billion rupees in the company.
Tata Elxsi (TTEX.NS) fell 4.6% after multiple brokerages cut fiscal 2027 earnings estimates after their June quarter results, citing margin worries.
($1 = 96.1625 Indian rupees)