BENGALURU: Indian shares closed higher on Thursday, in contrast to weakness in Asian and European equities, bucking concerns around an escalating Sino-U.S. trade conflict and rising odds of further policy tightening by the U.S. Federal Reserve.
The Nifty 50 index settled 0.51% higher at 19,497.30, while the S&P BSE Sensex advanced 0.52% to 65,785.64, with both indexes hitting a record close.
Reliance Industries, the highest weighted stock in the Nifty, rose over 2% and led gains in the index, after a report said that its telecom arm is likely to sign a contract worth $1.7 billion with Nokia to buy 5G network equipment.
Indian shares close flat as auto, consumer stocks offset slide in financials
The rise in Reliance also powered oil & gas index which rose nearly 2%. Realty index jumped over 2%, aided by strong quarterly updates from several constituents.
The jump extended broader markets as well, with smallcap and midcap indexes hitting fresh over-one-year and record highs, respectively.
“Expect Indian equities to consolidate in the third quarter of 2023 after a 11% rally in June quarter,” six analysts at Goldman Sachs said in a note on Wednesday.
They also added that the recent rise in Indian equities was entirely supported by persistent foreign buying. Foreign portfolio investors (FPIs) inflows in Indian equities exceeded 1 trillion rupees in the first three months of fiscal 2024.
In contrast to domestic equities, Asian and European markets declined after minutes of the June Fed meeting showed that most members expected further policy tightening. The odds of a Fed rate hike in July currently stand at 91.1%.
Concerns over U.S.-China trade relations also weighed on sentiment. The U.S. said that it was firmly opposed to the export controls announced by China.
The MSCI Asia ex-Japan index dropped 1.52%, while European markets also edged lower.
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