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Indian shares rebound on IT boost, state-run banks dip

BENGALURU, Sept 25 (Reuters) - Indian shares on Friday bounced back from their longest losing streak since February, boosted by IT stocks, although gains were capped due to pressure on lenders after India extended the suspension of bankruptcy filings.

The broader NSE Nifty 50 index rose 0.72% to 10,882.15 and the S&P BSE Sensex climbed 0.7% to 36,809 by 0458 GMT, after falling for six straight sessions.

Both the indexes are still set for their worst week since early-May, having fallen around 6% each up to Thursday’s close, on worries over the impact of surging cases of the novel coronavirus on the global economic recovery.

“We feel this is just a relief rally and (its) sustainability will be difficult as the banking index still looks weak,” said Ajit Mishra, vice president, research at Religare Broking.

The Nifty IT sub-index climbed 2.2% to be the best sectoral performer. Tata Consultancy Services Ltd was the biggest boost, rising as much as 4.4%. Up to Thursday’s close, the stock’s losses stood at 4.71%.

The Nifty PSU Bank Index, which tracks state-owned lenders, slipped 0.24%, while the Nifty Bank Index posted muted gains of 0.15%.

The suspension of bankruptcy filings, aimed at helping businesses stay afloat amid the pandemic, will stop banks from initiating insolvency proceedings against any borrower for defaults arising on or after March 25, 2020.

Meanwhile, broader Asian peers rose on Friday after an overnight tech-led rally in U.S. stocks, on hopes of economic stimulus from the United States.

Shares of Granules India Ltd rose as much as 9.5% after a report said KKR, Bain Capital, Blackstone were in the race for a majority stake in the pharma company.

India’s Cipla rose as much as 3.92% after it got a final approval from the U.S. FDA for a generic version of Biogen IDEC’s multiple sclerosis drug Tecfidera. (Reporting by Nallur Sethuraman in Bengaluru; editing by Uttaresh.V)

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