Indian shares extend gains, powered by financials' surge

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai

BENGALURU (Reuters) - Indian shares extended gains for the second session on Tuesday, helped by an uptick in financials on strong quarterly updates.

The Nifty 50 index closed 0.19% higher at 18,232.55, while the S&P BSE Sensex rose 0.21% to 61,294.20. The Nifty 50 has seen support at the 100-day moving average (DMA) level and resistance at the 50-DMA level for eight sessions in a row.

Graphic: Nifty 50 trades between 100-day and 50 day SMA

Most of the major sectoral indexes closed with gains after a weak start, with the high-weightage financials rising 0.64% and IT stocks adding 0.78%. Twenty-six of the Nifty 50 constituents advanced with HDFC Life, SBI Life, Axis Bank and Titan among the top gainers.

Among financials, CSB Bank, South Indian Bank and Karnataka Bank rose between 2% and 6.5% after they gave strong quarterly updates, including reporting a rise in deposits.

"There is valuation comfort in India's banks despite the recent run-up," according to Saion Mukherjee, head of equity research at Nomura, who cited balance sheet clean-up and an improvement in asset quality as primary reasons for the positive outlook.

Since Sept. 30, 2022, financials have climbed 9.65% compared to Nifty 50's 6.66% rise.

Both the Indian equity benchmarks had fallen over 0.25% earlier in the session as weak economic data from China fuelled fears that a rapid spread of COVID cases would weigh on global growth.

The minutes of last month's Federal Reserve meeting, due on Wednesday, could lead to volatility in the next few sessions, said analysts.

Among individual stocks, Zomato Ltd dropped 2.32% after the food delivery company's co-founder and chief technical officer resigned.

New Delhi Television shares rose 1.47% after majority stakeholder Adani Enterprises said its unit would pay an additional 48.65 rupees per share to NDTV's investors whose shares were accepted in the open offer. ($1 = 82.7450 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil, Savio D'Souza and Janane Venkatraman)