Indian shares rise after Fed holds rates steady; earnings-led gains boost optimism

Indian shares experienced a rebound on Thursday, climbing back from a recent decline as the US Federal Reserve maintained interest rates as anticipated, and strong quarterly earnings boosted investor optimism. The benchmark Nifty 50 index rose 1.1% to 22,936.75, while the BSE Sensex added 1.2% to 74,151.04. These indexes had slipped about 2% each in the preceding seven sessions, dropping in six out of seven sessions, driven by high crude oil prices.

Outside of India, Asian markets experienced uncertainty as AI-related earnings announcements generated a diverse range of reactions. The Federal Reserve decided to leave interest rates unchanged on Wednesday, postponing any adjustments to borrowing costs until after the upcoming US midterm elections while it awaited additional data on inflation, which the Fed noted had remained "elevated."

Arun Malhotra, a fund manager at CapGrow Capital, observed that the Indian market appeared to have bottomed out following its recent slide, with positive earnings reports from various sectors bolstering overall market sentiment. Across the 16 major sectors, 15 rose, and both small-caps and mid-caps saw gains of 1% each. Financials and information technology stocks led the rise, with financials up 1.2% and IT firms increasing by 1%.

Stock-specific events played a significant role in the market's momentum, as earnings season was in full swing. Adani Ports & Special Economic Zone and Adani Enterprises led the Nifty 50 with the highest percentage gains. Adani Ports surged 6.3% to a near four-month high after reporting higher quarterly profits fueled by strong cargo volumes and raising its operating profit forecast.

Adani Enterprises also experienced a 5.2% increase after delivering robust earnings for July-September. Consumer goods giant Hindustan Unilever climbed 2.3% as investors weighed higher quarterly profits against commodity inflation.

In the power sector, companies Power Grid Corporation of India and NTPC saw significant gains of 3.4% and 2.2%, respectively. This optimism was attributed to favorable El-Nino conditions expected to drive strong power demand.