* Both NSE, BSE indexes rise 0.2% each
* U.S. Secretary of State Pompeo visits New Delhi
* L&T, Power Grid among top gainers
June 26 (Reuters) - Indian shares inched higher on Wednesday in thin trade as investors stayed on the sidelines ahead of a key U.S.-India meeting later in the day and federal budget next week.
U.S. Secretary of State Mike Pompeo has arrived in New Delhi for talks with Indian leaders, where he is expected to tackle a host of delicate issues from trade to New Delhi’s longstanding defence and energy ties to Russia and Iran.
Market participants also wait for clues from the 2019-20 budget which Finance Minister Nirmala Sitharaman will present on July 5.
The government is under pressure to loosen the purse strings to follow through on election promises such as increased spending on roads and housing and tax cuts for companies and individuals.
“People have significant hopes from the upcoming budget and they want to see additional reforms, which I think the government is going to come up with,” said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
“Investors are still a little concerned about slowdown in consumption. Some of it was related to election uncertainty and a lot of investors were on the sidelines, but much of that will now get resolved as we have a stable government. What really is critical that the government comes up with lower interest rates to aid consumption.”
The broader NSE index was up 0.15% at 11,813.90 as of 0502 GMT, while the benchmark BSE index was 0.17% higher at 39,500.13.
Trading volume was very thin with only about 60 million shares changing hands in the first hour of trade in the NSE index, compared with the 30-day average of 383.6 million shares.
Industrials and financials accounted for most of the gains. Larsen & Toubro Ltd rose 1.9%, Power Grid Corp of India climbed over 3%, while Axis Bank added 1%.
Meanwhile, shares in Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) declined after crude oil prices ticked up more than 1% to their highest in nearly a month.
In addition, IOC Chairman Sanjiv Singh told Reuters on Tuesday that he expected growth in India’s demand for gasoline and jet fuel to slow slightly this year, as prospects for world trade deteriorate.
IOC shares fell 1.3%, while BPCL declined 1.8%.
Among other losers, Dewan Housing Finance Corp Ltd (DHFL) plunged 9.1% after the troubled mortgage lender said it had only been able to make 40% payment on unsecured commercial papers due on Tuesday.
Meanwhile, Asian stocks retreated and the dollar inched up from three-month lows after U.S. Federal Reserve officials tempered expectations in the markets for aggressive monetary easing. (Reporting by Krishna V Kurup in Bengaluru; Editing by Subhranshu Sahu)
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