Indian shares edge higher on metal, IT stocks; CEAT falls

Bengaluru, October 26 (Reuters): Indian shares inched higher on Tuesday as metal and information technology stocks countered losses in private banks, while investors awaited commentaries from companies over the impact of higher input costs on margins in an earnings-heavy week.

The blue-chip NSE Nifty 50 index (.NSEI) was up 0.1% at 18,143 by 0516 GMT, while the benchmark S&P BSE Sensex (.BSESN) rose 0.2% to 61,099.

The Nifty IT index (.NIFTYIT) gained 0.6%, with Tech Mahindra (TEML.NS) leading the rally with a 5% surge on strong quarterly earnings. The metals index (.NIFTYMET) rose 1.5%.

Tyre maker CEAT Ltd(CEAT.NS) and paint maker Kansai Nerolac (KANE.NS) fell 7.9% and 3.7%, respectively, after they reported a drop in net profit on higher input costs.

“Markets thought inflation was transitory and margins will get adjusted with the volume growth. But the issue will likely persist for one more quarter and the impact is visible in current earnings,” said Vinod Nair, head of research at Geojit Financial Services.

Many top-tier companies including India’s leading car maker Maruti Suzuki (MRTI.NS), Larsen & Toubro (LRTI.NS) and cigarette maker ITC (ITC.NS) will report their earnings later this week.

The Nifty public sector bank index (.NIFTYPSU) rose 2.74% on expectations of an improvement in asset quality and strong quarterly results, analysts said. The index has gained more than 18% so far this month. The Nifty bank index (.NSEBANK) was the top drag, falling 0.6% after gaining more than 2% on Monday.

Shares of housing finance company Home First Finance , Orient Cement Ltd (ORCE.NS) and consumer products maker Crompton Greaves Consumer Electricals (CROP.NS) surged 8.9%, 6% and 4% respectively, on strong quarterly earnings.

Meanwhile, analysts cautioned that a near 30% gain in India’s benchmark indexes has heated up equity valuations and warned that markets could see a steep correction in certain pockets.

National Stock Exchange data on Monday showed its registered investor base surpassed 50 million unique users and it saw its last 10 million investor registrations in less than seven months.


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Source: Reuters