Indian shares settle at new highs; extend rally for fourth day

FILE PHOTO: Bombay Stock Exchange (BSE) in Mumbai

By Bharath Rajeswaran

BENGALURU (Reuters) - India's main benchmark indexes closed at record highs for a second day on Friday, as risk-on sentiment remained in broader equities after a less-hawkish tone from the minutes of the U.S. Federal Reserve's rate-setting committee on Wednesday.

The benchmark S&P BSE Sensex rose 0.03% to 62,293.64. The NSE Nifty 50 index settled 0.15% higher at 18,512.75, the first time ever the 50-stock gauge has closed above 18,500. Both indexes extended their winning streak for the fourth day, logging weekly gains of over 1%.

However, the rise was marginal on Friday, as Sensex and Nifty trimmed intraday gains of nearly 0.3%.

Investors stayed on the sidelines for the most part due to a lack of cues from the U.S. markets, shut on Thursday, said Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities.

"The markets may react sharply on Monday," he added.

The broader indices outperformed their larger peers, with Nifty Midcap 100 and Nifty Smallcap 100 adding 0.95% and 1.12%, respectively.

The Nifty's auto and oil & gas indexes were among top sectoral gainers, rising over 0.8% each. The Nifty IT index recovered from a muted start to end the session with gains, following a slide in the U.S. dollar index to a three-month low on Thursday.

IT sector could be a direct beneficiary in the near term while global cyclicals and manufacturing companies could join the rally later, said Narendra Solanki, Head - Equity Research (Fundamental) at Anand Rathi Investment Services. Solanki expected the Nifty 50 to rise as much as 19,500 by October next year.

According to traders, the less hawkish Fed minutes led to a general sense that the Reserve Bank of India (RBI) would also temper its monetary policy.

Public sector banks extended their rally to a ninth session, although the gains were marginal. Punjab National Bank closed 5.4% higher after receiving government approval to divest its stake in UTI Asset Management Co which settled 8.1% up.

HDFC Life Insurance Co and Tata Motors Ltd were the top gainers on the Nifty 50 index, climbing over 2% each.

(Reporting by Bharath Rajeswaran in Bengaluru and Akansha Victor; Editing by Savio D'Souza, Eileen Soreng, and Janane Venkatraman)