Reuters

India`s stock benchmarks bounced back from early losses, aided by a recovery in energy and financials, after booking profits at record high levels in the previous session even as the global market rally lost steam.

The blue-chip NSE Nifty rose 0.50% to 21,255.05, while the S&P BSE Sensex advanced 0.51% to 70,865.10.

"We think there is still room on the upside for Indian markets," said Sanjiv Bhasin, director at IIFL Securities, citing rising foreign inflows on India`s demographic premium, consumption growth, easing global rate outlook and robust domestic growth momentum.

The Nifty 50 is up 5.57% so far in December, on course to log its best monthly performance in 2023, despite profit-taking on Wednesday.

High-weightage energy and financial stocks, gained 1.77% and 0.59%, respectively, on the day, leading the index gains. They had dropped 2.68% and 1.09%, respectively, in the previous session.

Reliance Industries, the second heaviest stock in Nifty 50, gained 1.4% on multiple block deals.

The small-caps and mid-caps gained about 2% and 1.7%, respectively, after a sharp slide in the previous session.

"The prevailing expensive valuations in the small- and mid-cap segments of the market can make these stocks particularly sensitive to changes in market trajectory, sentiment and external factors," said Rahul Sharma, managing partner at Equity 99.

The small- and mid-caps have gained 51% and 42% in 2023 so far, respectively, compared to a 17.4% rise in the Nifty 50.

Media surged 2.49%, powered by a 4.07% rise in top constituent Zee Entertainment Enterprises after the company said it is in talks with Sony Group`s India unit to extend a merger deadline.

Cochin Shipyard and Mazagon Dock Shipbuilders gained 6.19% and 3.65%, respectively, after signing contracts with India`s Ministry of Defence.

Asian shares fell after a drop in Wall Street equities overnight as the focus in the United States turned to third-quarter growth data on Thursday and a key inflation reading on Friday.