BENGALURU (Reuters) -Indian shares reversed losses to move higher on Tuesday, helped by an uptick in financials on strong quarterly updates and hopes of liquidity surplus in the banking system.
The Nifty 50 index was up 0.18% at 18,230.05 as of 11:25 a.m. IST, while the S&P BSE Sensex gained 0.15% to 61,260.25.
Most of the major sectoral indexes swung to gains after a weak start, with the high weightage financials rising 0.4% and IT stocks adding over 0.5%. On the day, 35 of the Nifty 50 constituents advanced.
Among financials, CSB Bank, South Indian Bank and Karnataka Bank rose between 5% and 6.5% after they gave strong quarterly updates, including reporting a rise in deposits.
That was encouraging news ahead of the quarterly earnings period. “Earnings for the December quarter will aid the markets” in the near term, said Avinash Gorakshakar, head of research at Profitmart Securities.
Traders also expected India’s banking system liquidity to post a surplus in the first fortnight of January after slipping to a deficit in the last two weeks of December for the first time in over three-and-a-half years.
Analysts said high government spending would aid liquidity in the system and added that the outlook remained positive for banks due to high credit growth and improving asset quality.
Both the Indian equity benchmarks had fallen over 0.25% earlier as weak economic data from China fuelled fears that a rapid spread of COVID-19 cases would weigh on global growth.
However, most Asian markets shrugged off those concerns to recover from a weak open. The MSCI Asia ex-Japan index last up 0.49%. [MKTS/GLOB]
Analysts said that minutes of the last Federal Reserve meeting, due on Wednesday, could add volatility to the next few sessions.
Among individual stocks, Zomato Ltd dropped about 2% after the food delivery company’s co-founder and chief technical officer resigned. ($1 = 82.7450 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil and Savio D’Souza)
