By Bharath Rajeswaran
(Reuters) -Indian shares rose on Tuesday led by HDFC Bank and Reliance Industries, the two heaviest-weighted stocks on the Nifty 50, with analysts attributing the rise to cheaper valuations after the benchmarks slipped into correction territory recently.
The NSE Nifty 50 rose 0.64% to 24,431.55 points, as of 11:20 a.m. IST, while the BSE Sensex gained 0.69% to 80,806.5.
The Nifty 50 is now 7% below its all-time high levels hit in late September. Both benchmarks fell into correction territory last month.
“The excess (valuations) across large-, mid- and smallcaps (were) corrected and the froth now seems to be out, prompting buying interest among investors,” said Devang Mehta, director of equity advisory at Spark PWM.
High-weightage financials gained 1%, led by a 1.7% rise in HDFC Bank.
Heavyweight Reliance Industries, which has gained 3% in the last two sessions, added 1% on the day.
Public sector banks climbed 2.7%, with State Bank of India, Punjab National Bank rising 2.3% each and Bank of Baroda gaining 3%.
The more domestically focused smallcaps and midcaps added about 0.7% each.
There is a bit more safety in largecaps, seen through the recent rise in heavyweights, Mehta said, adding that selected smallcaps and midcaps, especially those with positive earnings outlook, also offer hopes of better returns.
Eleven of the 13 sectoral indexes logged gains.
Consumer index shed 0.7% after media reports said the government plans to hike the goods and services tax (GST) on products such as aerated beverages, cigarettes and other tobacco-related items to 35% from the current 28%.
Cigarette maker ITC slid 1.6%, while Pepsi bottler Varun Beverages dropped 3%.
Adani Ports rose 4% on the day, after Bernstein reiterated “outperform”. The stock trades cheaper than its peers JSW Infra and Container Corp, the brokerage said.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Janane Venkatraman)
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