Indian shares recover from weak open as HDFC, Reliance rebound

BENGALURU, Jan 31 (Reuters) - Indian shares recovered from a weak start on Wednesday, led by a rise in index heavyweights HDFC Bank, Reliance and ICICI Bank ahead of the keenly awaited Federal Reserve monetary policy decision.

The blue-chip NSE Nifty 50 index rose 0.74% to 21,680.10 points and the S&P BSE Sensex was up 0.70% at 71,666, as of 1:00 pm. IST.

Both the indexes had lost about 0.3% in early trade. The volatility index hovered around the 10-month high hit in the previous session, when the indexes opened higher but ended with losses, mainly due to profit booking in Reliance Industries.

As per experts, the Fed is expected to keep interest rates unchanged in its policy decision, due after the Indian market closes. In addition, any clarity regarding the timeline of rate cuts would have a major bearing on global markets.

The Indian government is due to announce its interim budget on Thursday morning, which is likely to trigger stock-specific movements in response to sectoral allocations.

HDFC Bank, the heaviest-weighted Nifty stock, rose 1.7% after a 0.7% drop on Tuesday.

Reliance, the second-heaviest Nifty stock, rose 1.1%. It dropped 2.8% on Tuesday after jumping 7% to a record high to start the week.

Relative valuation comfort has triggered investor interest in large-caps like Reliance and HDFC, Gandhi said.

Tata Motors gained 2.1%, the most on the Nifty, a day after its 2% rise helped it dethrone Maruti Suzuki as India's most valuable carmaker by market capitalization.

Larsen & Toubro dropped 3.7%, the most on the Nifty, after the infrastructure company missed third-quarter profit estimates.