By Bharath Rajeswaran and Indranil Sarkar
(Reuters) -India’s benchmark indexes inched higher on Wednesday as investors cautiously stepped in after a battering in the previous session that sent the index to a seven-month low.
The Nifty 50 was up 0.29% at 23,092.46 points as of 10:18 a.m. IST, while the BSE Sensex added 0.46% to 76,189.48.
The indexes tumbled about 1.5% each on Tuesday due to uncertainty over Donald Trump’s plans for India after the U.S. President announced trade tariffs on neighbouring countries within hours of taking office.
“The sharp drop in benchmarks has provided a good opportunity for long-term investors to buy quality large-cap stocks, which is powering the bluechips higher,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
HDFC Bank and Reliance Industries, the two heaviest stocks on the indexes, rose about 0.5% each. HDFC Bank is due to report its quarterly results later in the day.
IT stocks gained 0.8% after a 1.2% drop in the previous session.
However, the smallcaps and midcaps continued to suffer from high valuations.
They fell about 1.5% each on the day, taking their declines so far in January to 8.5% and 7.2% respectively, while the Nifty 50 has shed 2.4%.
The underperformance, said analysts, was primarily due to their relatively costly valuations and concerns over earnings on the back of a slowdown in the domestic economy.
Life insurer ICICI Prudential fell 8.5% after its value of new business margins contracted in the latest quarter.
Electronics manufacturing services company Cyient DLM tumbled 12.4% after reporting a lower third-quarter profit.
(Reporting by Bharath Rajeswaran and Indranil Sarkar in Bengaluru; Editing by Rashmi Aich, Sonia Cheema and Savio D’Souza)
