Financial data leads Indian shares to third weekly gain ahead of earnings season

Authors: Bharath Rajeswaran and Kashish Tandon

BENGALURU (Reuters) – Indian shares posted a third straight weekly gain on Friday, led by financial data, while the central bank left its key interest rate unchanged as expected.

Both Nifty and S&P BSE Sensex added around 0.8% each during the week.

Financial services, the top-weighted sub-index, gained 2.70% this week, the highest in four months, led by a rally in leading private lender HDFC Bank after it reported a sequential increase in deposits in the March quarter.

HDFC Bank gained 7.02% this week, the highest since November 2022.

Meanwhile, the Reserve Bank of India (RBI) on Friday kept the key interest rate at 6.50% for the seventh consecutive year.

Real estate, the country’s interest rate-sensitive sector, rose 1.43% on the day and 4.12% on the week.

Apart from strong sales momentum in the real estate market, India’s strong growth prospects and the RBI sticking to a stable interest rate outlook bode well for the real estate sector, said Shishir Baijal, chairman and managing director, Knight Frank India.

There was little change in the Nifty 50 and Sensex stores on this day.

Among individual company shares, Divi’s Laboratories rose by 8.79%, supported by BofA’s double price reduction of the drugmaker’s shares at the beginning of the week, citing earnings momentum.

Three analysts say India’s quarterly earnings season, which begins next week, will weigh on the markets’ near-term trajectory.

The latest Nifty 50 entrant – Shriram Finance – rose 6.74% for the week, helped by reports that Warburg Pincus was the frontrunner to buy the company’s residential real estate finance business.

US currency-sensitive IT shares fell 0.5% on the day after comments from Federal Reserve officials heightened concerns about a delay in US interest rate cuts.

Broader, more domestically focused small- and mid-cap stocks gained 0.84% ​​and 0.56%, respectively, on the day.

They are up 7.1% and 4.05% this week, after losses of 4.42% and 0.54% in March on worries about frothy valuations.

(Reporting by Bharath Rajeswaran and Kashish Tandon in Bengaluru; Editing by Rashmi Aich, Shounak Dasgupta, Sonia Cheema and Varun HK)