By Vivek Kumar M and Bharath Rajeswaran
(Reuters) -Financials lifted Indian shares for a third straight session on Wednesday, with mid-caps logging their best day in nine months as investors scooped up cheaper stocks on easing valuations.
The NSE Nifty 50 gained 0.32% to 22,907.60, while the BSE Sensex closed 0.2% higher at 75,449.05.
The broader midcaps and smallcaps jumped 2.6% and 2.4%, respectively.
The midcap index clocked its biggest single-day percentage gain since early June 2024.
“Valuations have softened towards levels from where we can expect a sustainable bounce back,” said Mohit Nigam, fund manager at Hem Securities, adding that concerns over U.S. tariffs on India are “overblown”.
The blue-chip Nifty is still down about 13% from record highs hit on September 27, 2024, while the mid and smallcap indexes are down 17% and 20%, respectively, from their all-time highs.
Meanwhile, foreign portfolio investors (FPIs) turned buyers of Indian stocks for the first time in March and only the fourth time in 2025, as per provisional data on Tuesday.
Financials led sectoral gains on Wednesday, rising 0.7%, as analysts expect them to outperform the broader market amid attractive valuations.
Metals rose 1.3% after the government recommended a safeguard duty of 12% on some steel imports to shield local firms.
Gains in the benchmark indexes were capped by a 1.1% fall in IT stocks, which derive a significant chunk of revenue from the U.S., as investors awaited the Federal Reserve’s policy decision later in the day.
Investors are focusing on the Fed’s commentary on the U.S. economy and the future rate trajectory to assess the impact of U.S. tariffs. The central bank is expected to hold rates steady later in the day.
Among domestic stocks, Infosys and Tata Consultancy Services fell about 1.5% each, and were the biggest drag on the sector and blue-chips.
Defence stocks were among the top gainers in the broader market, with Garden Reach Shipbuilders & Engineering soaring 20%.
(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy and Sonia Cheema)
