MUMBAI — Indian shares rose a second consecutive session day on Wednesday as blue-chips recovered from recent falls after Federal Reserve Chair Janet Yellen suggested the U.S. central bank would not rush into raising interest rates.
The Fed is preparing to consider interest rate hikes "on a meeting-by-meeting basis," Yellen told a U.S. congressional committee on Tuesday, a subtle shift of emphasis that helps lay the groundwork for the first U.S. rate hike since 2006.
Sentiment also got bolstered after overseas investors bought Indian shares worth 6.97 billion rupees ($112.3 million) on Tuesday, buying shares worth $884.34 million for the fourth straight session.
Still, broader gains were tempered by caution ahead of an event-heavy week.
Among events this week include the expiration of February derivatives contracts on Thursday, and most importantly, the government's fiscal budget for the new fiscal year starting in April due on Saturday.
"People are waiting for the big event. Expectations are high and I think the budget will be the trend setter. But we advise our clients to be cautious," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.
The benchmark BSE index gained 0.72 percent to 29,214.53, while the broader NSE index added 0.6 percent to 8,815.30.
Heavyweights were the gainers. Housing Development Finance Corp Ltd, which had lost 3.2 percent in the last three sessions, gained 2.35 percent, while Reliance Industries , which slumped 6.8 percent in the last three sessions, added 1.3 percent.
DLF Ltd, which had lost about 3 percent since Friday after the NSE said the stock would be removed from the Nifty index, added 1.5 percent. ($1 = 62.0500 rupees)