By Bharath Rajeswaran
BENGALURU (Reuters) – Indian shares edged higher on Thursday, aided by information technology (IT) stocks amid cooling inflation in the United States, but hotter-than-expected domestic inflation kept investors cautious as the blue chips trimmed intraday gains.
The Nifty 50 index closed 0.15% higher at 19,413.75, while the S&P BSE Sensex rose 0.25% to 65,558.89.
Both benchmarks rose 1% each to hit fresh record highs in intraday trading, with the Sensex hitting the 66,000 mark for the first time before paring gains in the final hour.
Asian and European markets advanced following overnight gains in Wall Street equities after U.S. consumer price index for June logged the smallest rise in over two years.
The moderation in U.S. inflation also outweighed concerns over hotter-than-expected domestic inflation and powered IT stocks despite Tata Consultancy Services and HCLTech flagging weakness in demand in their June quarter earnings commentary.
IT firms earn a significant share of their revenue from the world’s largest economy. In fact, TCS, Infosys and Tech Mahindra were among the top Nifty 50 gainers.
Despite the bluechip and midcap indexes hitting fresh record highs during the session, analysts advised investors to remain cautious and selective.
“This is just good sentiment following U.S. inflation data that is powering domestic equities. Both midcaps and largecaps have moved ahead of valuation comfort,” said Avinash Gorakshakar, head of research at Mumbai-based brokerage Profitmart Securities.
“Investors need to be a little cautious. If earnings disappoint, there could be sizable correction too.”
Among individual stocks, Hindalco rose 2.44% and was among the top Nifty 50 gainers on plans to sell a land asset in Mumbai.
Patanjali Foods lost 5% after its largest shareholder said it would sell up to 9% of its stake to meet public shareholding rules.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman, Sohini Goswami and Dhanya Ann Thoppil)
