March 6, 2019 / 6:12 AM / 7 months ago

Indian shares rise; mid-caps regain footing

* NSE index up 0.42 pct, BSE index 0.37 pct higher

* Dewan Housing jumps after auditor report

* Reliance Industries, ICICI Bank top contributors

By Tanvi Mehta

March 6 (Reuters) - Indian shares rose on Wednesday, with renewed interest in midcap stocks, as tensions with neighbouring Pakistan appeared to be easing further, boding well for the markets weeks ahead of parliament elections.

Escalating tensions with nuclear-armed Pakistan took a toll on the markets last week, but the major indexes recouped losses and posted their biggest weekly gain in four.

“Political uncertainty was the major theme why the market corrected. People feel that we will have a single party rule again, or a combination of people will return to power, giving confidence to the market,” said AK Prabhakar, head of research, IDBI Capital, adding that mid-caps had begun to perform well again.

“(From the latest developments), the market has sensed the current government will come for a second term.”

The broader NSE index was up 0.42 percent at 11,033.95 as of 0537 GMT, boosted by market heavyweights like Reliance Industries Ltd and ICICI Bank Ltd.

The benchmark BSE index was 0.37 percent higher at 36,576.08.

Mid-cap stocks, which lost their attractive valuations last year, have begun to shine again. The Nifty Mid-cap 100 index , which fell 6 percent in the first two months of this year, has recouped most of the losses in the last two weeks. It gained as much as 1.1 percent on Wednesday morning.

IT stocks rose after falling in the previous session. Wipro Ltd was the top percentage gainer on the NSE index, up 3.5 percent.

Dewan Housing Finance Corp Ltd jumped as much as 21 percent after the company released a report by an independent chartered accountant saying it had not created shell companies to divert funds. (Reporting by Tanvi Mehta in Bengaluru; Editing by Gopakumar Warrier)

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