Indian shares rise as large-cap valuations, easing foreign selling boost optimism

By Bharath Rajeswaran and Vivek Kumar M

(Reuters) -India's benchmark indexes rose on Friday, rebounding from a subdued start, buoyed by attractive valuations in large-cap stocks and on renewed optimism over signs of easing foreign selling.

The NSE Nifty 50 was up 0.51% at 23,312.45, while the BSE Sensex gained 0.48% to 76,717.53, as of 10:40 a.m. IST.

The benchmarks fell about 0.2% each at the open before reversing losses.

The Nifty has risen in each of the previous four sessions, clocking its longest daily winning run in about seven weeks. Including Friday's gains, it is now up about 4% this week, on course for its best week since July 2022.

"Currently, we are witnessing a relief or pull-back rally that could last up to 23,300-23,500 levels, with large-caps trading at attractive valuations," said Shrikant Chouhan, head of equity research at Kotak Securities.

While expectations of stable economic growth and a recovery in earnings should support Indian markets in the coming fiscal, any negative news on tariffs may weigh on investor optimism, Chouhan said.

A moderation in foreign outflows has also aided sentiment, according to analysts.

Foreign portfolio investors (FPIs), who have been persistent sellers of Indian equities since late last year, turned buyers in two of the last four sessions, per provisional data.

All 13 major sectors logged gains. IT stocks , which fell over 2% at the open after Accenture flagged a slowdown in U.S. discretionary spending, reversed losses to trade 0.4% higher.

The broader, more domestically focussed smallcaps and midcaps rose about 1.8% and 1.3%, respectively.

Among stocks, non-bank lender Bajaj Finance rose 3.1%, extending its record-high rally, a day after it elevated veteran leader and managing director Rajeev Jain to vice chairman, which analysts termed a "smooth" succession.

Manappuram Finance jumped 3% after the gold loan provider said Bain Capital will acquire an 18% stake in the company for 43.85 billion rupees ($508.4 million).

($1 = 86.2580 Indian rupees)

(Reporting by Bharath Rajeswaran and Vivek Kumar in Bengaluru; Editing by Varun H K and Sonia Cheema)