July 13, 2020 / 5:16 AM / a month ago

Indian shares gain on rate cut hopes, Reliance rally

* NSE Nifty up 0.79%, BSE Sensex rises 0.78%

* Headline inflation data for June expected Monday evening

* Reliance, Biocon touch fresh peaks

By Derek Francis

BENGALURU, July 13 (Reuters) - Indian shares climbed on Monday, as investors bet June inflation data later in the day would lead to further interest rate cuts by the country’s central bank, while Reliance Industries gained for a third session.

The broader NSE Nifty 50 index rose 0.79% to 10,853.1 by 0427 GMT and the benchmark S&P BSE Sensex was up 0.78% at 36,880.57.

A Reuters poll last week showed India’s headline inflation likely eased to 5.3% in June, still just over a point above Reserve Bank of India’s medium-term target of 4.0%.

RBI governor Shaktikanta Das on Saturday also said inflation will continue to moderate going forward and investment activity will revive, but cautioned about uncertainty in the economy’s medium-term outlook.

“Some stimulus may come in the form of rate cuts. The inflation data should offer room for such a decision,” said Anita Gandhi, a director at Arihant Capital Markets in Mumbai.

“The sentiment is positive, but going forward, markets will be driven by corporate earnings and liquidity.”

Expectations of easing inflation come amid surging coronavirus cases as Asia’s third-largest economy began lifting lockdown restrictions to help revive the economy.

India recorded 28,701 more coronavirus cases in the last 24 hours, taking the total to 878,254 including 23,174 dead.

Among stocks, Reliance rose for a third-consecutive day and touched a fresh record high of 1,939 rupees in the session on Qualcomm Inc’s 7.3 billion rupees ($97.11 million) investment in the company’s Jio Platforms.

Reliance, India’s most valuable stock, rose as much as 3.25% and was among the top gainers on the Nifty.

Biocon Ltd also touched a fresh peak, rising as much as 7.9%, after it got regulatory approval to market its psoriasis drug Itolizumab for emergency use to treat an overreaction of the immune system in COVID-19 patients.

Large shadow lender HDFC Ltd was among the few laggards for the day, shedding nearly as much as 1%. (Reporting by Derek Francis in Bengaluru; Editing by Shailesh Kuber)

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