Indian shares rally for second month; GDP data, Powell speech eyed

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India, February 1, 2020. REUTERS/Francis Mascarenhas

BENGALURU, Nov 30 (Reuters) - Indian shares closed at record highs for a fifth straight day on Wednesday, extending their daily rally to seven days and logging a second straight month of gains, boosted by hopes of a less hawkish interest rate environment.

A surge in the final half an hour of trading boosted the two main indexes. The S&P BSE Sensex (.BSESN) closed 0.67% higher at 63,099.65, and the NSE Nifty 50 index (.NSEI) finished 0.75% higher at 18,758.35.

The Nifty gained 4.14% in November, while the Sensex rose 3.87%, though the gains were less than in October. The two indexes have been on a tear since the minutes of the U.S. Federal Reserve's last meeting, released a week back, raised expectations the central bank could ease its monetary policy.

India's retail inflation also eased to a three-month low of 6.77% in October, boosting expectations the Reserve Bank of India could also follow suit with its own rate hike path.

Fed Chair Jerome Powell's speech later today, at a Brookings Institution event, while India's July-September economic data, also due later today are the next near-term key events.

"Markets will not react much to GDP growth rate, which is likely to be on expected lines, but could react more to the tone of Jerome Powell," said G Chokkalingam, Founder, Equinomics Research & Advisory.

"Powell's tone will be modest, which could provide a further leg up to markets," Chokkalingam said, adding that most macro indicators including rabi and kharif output, tax collections as well as banking credit looked robust, which could allow the government to increase its capital expenditure.

The Indian economy likely returned to 6.2% annual growth rate in July-September after double-digit expansion in the previous quarter, according to a Reuters poll.

On the day, all the Nifty sectoral indexes, except the PSU index (.NIFTYPSU), advanced, with metal (.NIFTYMET), energy (.NIFTYENR) and auto (.NIFTYAUTO) climbing more than 1.7% each.

Among individual stocks, Varun Beverages (VARB.NS) surged over 9% to a record high, after multiple block deals.

Reporting by Bharath Rajeswaran and Akansha Victor in Bengaluru; Editing by Dhanya Ann Thoppil and Eileen Soreng

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