By Bharath Rajeswaran and Archishma Iyer
BENGALURU (Reuters) -Indian shares edged up in mid-day trade on Wednesday after a lackluster start, led by gains in financials and energy stocks as investors bet on large-cap companies amid heightened volatility in small- and mid-caps after a record run.
The Nifty 50 index was up 0.36% at 20,067.30 by 01:35 p.m. IST, while the S&P BSE Sensex rose 0.38% to 67,473.22.
The benchmarks outperformed the more domestically-focussed small-caps, which were volatile on Wednesday, swinging between gains and losses after seeing their steepest intraday fall this year in the previous session.
Mid-caps were down 0.35%, while small-cap stocks were up 0.2% after falling over 1% each earlier in the session.
“Retail inflows could shift to large-caps from small- and mid-caps and support the blue-chips,” said Saurabh Jain, assistant vice president of research at SMC Securities.
Financials and banks rose 0.5% and 0.8%, respectively, while energy stocks were up 1% and public sector banks gained 3.2%.
Meanwhile, the Reserve Bank of India tweaked investment classification and valuation norms for banks on Tuesday, which would reduce earnings volatility for lenders, Jefferies’ analysts said in a note.
Separately, SMC’s Jain said the weakness in China’s economy could lead to sustained foreign inflows into India, given the strong macroeconomic fundamentals.
Data released after the bell on Tuesday showed that India’s retail inflation eased in August, while industrial output rose at its fastest pace in five months in July.
Among individual stocks, KEC International jumped over 12% to a record high after securing new orders.
Shares of NMDC gained over 3% after domestic brokerage ICICI Securities upgraded the stock to “buy” from “add”, citing scope for volume growth.
(Reporting by Bharath Rajeswaran and Archishma Iyer in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema)
