Indian shares rise as banking crisis fears ebb; financials lead

BENGALURU, March 21 (Reuters) – Indian shares advanced on Tuesday, led by financials, as the rescue of troubled European lender Credit Suisse provided temporary relief, although contagion fears in banking cast a shadow.

The Nifty 50 index (.NSEI) was up 0.40% at 17,055.95, while the S&P BSE Sensex (.BSESN) rose 0.42% to 57,866.52, as of 11:07 a.m. IST.

Eleven of the 13 major sectoral indexes advanced with high-weightage financials (.NIFTYFIN) rising 0.6%. Thirty-two of the Nifty 50 constituents logged gains.

Reliance Industries (RELI.NS), the stock with the highest weightage in the Nifty 50, advanced more than 2.5% after global brokerage firm CLSA termed it a “bargain buy” at its current valuations.

The rise in domestic equities follows an uptick in global markets as concerns over the banking crisis eased after UBS’ state-backed takeover of Credit Suisse.

The quick execution of Credit Suisse’s takeover is a temporary relief but worries of contagion in global banking remain, analysts said.

“So far, five banks globally have succumbed- from Silvergate to Credit Suisse,” said Aishvarya Dadheech, fund manager at Ambit Asset Management, adding that he expects “more worms to come out,” keeping markets volatile in the near term.

Information technology (IT) stocks (.NIFTYIT) fell over 0.5% after brokerages cautioned that the banking woes in developed markets would likely lead to curbs on discretionary tech spending in the near term.

All 10 constituents of the IT index logged losses.

Indian IT companies get a significant share of their revenue from the U.S. and European markets.

Market participants now await the U.S.

Federal Reserve’s policy decision on Wednesday.

“The Fed has an unenviable job to control inflation with interest rate hikes, while also controlling the consequences of its rate hikes,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

(£1 = 82.5200 Indian rupees)

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil and Eileen Soreng

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