29-02-2024 04:07 PM | Source: Reuters
Indian shares recover from muted start; key economic data in focus

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Indian shares struggled for direction for most of the session on Thursday, logging gains at the close on a rise in Reliance Industries and financials stocks, while investors awaited key U.S. and domestic economic data.

The blue-chip index NSE Nifty 50 added 0.14% to 21,982.80, while the BSE Sensex gained 0.27% to 72,500.30. Both the benchmarks gained about 1% in February.

The benchmarks swung between gains of 0.3% and losses of 0.3% during the session, before inching up in the final 30 minutes of trade, ahead of the expiry of the February series monthly derivatives.

The Nifty 50 has been consolidating near the 22,000 level for the last 11 sessions, closing between 22,212.70 and 21,910.75 since Feb. 15.

Reliance Industries rose 0.67% after it announced a merger with Walt Disney on Wednesday, creating a $8.5 billion entertainment behemoth.

Heavyweight financials gained 0.33% while state-owned banks added 1.3%, as analysts saw valuation comfort in the segment.

The broader, more domestically focussed small- and mid-caps added 0.64% and 0.51%, respectively, recovering from a 1% drop earlier in the session.

They lost about 2% each on Wednesday on concerns about the flow of funds into the segment. India's market regulator asked money managers to consider restricting one-off investments into small- and mid-cap oriented equity mutual funds, Reuters reported citing sources.

The move seems a prudent choice, after the euphoric rally over the last year, said Mukesh Kochar, national head of wealth at AUM Capital. Small- and mid-caps gained about 74% and 61% in the last 12 months, outperforming a 26.2% rise in the Nifty 50.

Investors await a key U.S. inflation reading due after the closing bell, which could influence the Federal Reserve's future rate trajectory. The data comes amid a sharp pullback in early rate cut expectations.

India's economic growth data, also due after market hours, is expected to show that growth likely moderated to 6.6% in the October-December quarter.