Indian shares rose nearly 1 percent on Thursday, on track to snap a three-session losing streak, as consumer stocks gained on hopes lower inflation and a larger-than-expected rate cut by the central bank in September would boost spending in the coming festive season. India's wholesale prices fell for an 11th straight month in September, plunging an annual 4.54 percent primarily on the back of tumbling oil prices, government data showed on Wednesday.
India kicks off its two-month religious festive period on Monday, a time considered auspicious to buy big-ticket items such as cars, and when promotions abound. Company executives say they see the Reserve Bank of India's unexpectedly sharp 50 basis point cut last month as a lifeline. Consumers have already been showing an eagerness to spend more on small luxuries, like movie tickets and fancy haircuts, even as the overall economy struggles to take off after a period of cooler growth.
"Lower inflation, Seventh Pay Commission and RBI's rate cut are leaving higher discretionary income with urban people," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co. The broader NSE index rose 0.88 percent to end at 8,179.50, after losing a combined 1 percent over the previous three sessions. The benchmark BSE index rose 0.86 percent to end at 27,010.14, after falling 1.1 percent over the previous three sessions.
Consumer stocks led gains. Tata Motors shares were up 7.7 percent after unit Jaguar Land Rover reported a better-than-expected 3 percent sales growth for September. ITC rose 2 percent, while Maruti Suzuki gained 2.6 percent. Zee Entertainment surged 9 percent on better-than-expected September-quarter results.
Shares of Adani group companies were the top gainers among BSE large caps after Australia cleared way for the group's $7 billion coal and rail project. Adani Enterprises Ltd surged as much as 15.1 percent to post its biggest one-day gain since April 2014. Adani Power Ltd rose 5 percent and Adani Port and Special Economic Zone Ltd gained 1.5 percent. Among losers, DCB Bank fell as much as 13.3 pct to its lowest since early November 2014, adding to Wednesday's 20 percent plunge on its aggressive branch expansion plan.
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