Sensex, Nifty edge up as global cues boost sentiment

By Arnab Paul

(Reuters) - Indian shares rose on Friday, led by gains in IT stocks such as Tech Mahindra Ltd, as global sentiment improved after U.S. President Donald Trump agreed to meet North Korean leader Kim Jong Un.

Domestic shares tracked broader Asia which rallied on news of the first U.S.- North Korea summit after Kim Jong Un offered to stop nuclear and missile testing.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.56 percent.

However, analysts feel that domestic markets have largely discounted global cues, but added that the uncertainty around the tariff on steel and aluminium imports proposed by Trump could have a short-term impact on steel companies.

"I would definitely avoid steel stocks at the moment because of global uncertainties but also the valuations are too high," said Rudramurthy, managing director at Vachana Investments.

Steel Authority of India Ltd and Tata Steel Ltd were down 4.4 percent and 1.7 percent, respectively.

Trump on Thursday set import tariffs of 25 percent on steel and 10 percent on aluminium, but exempted Canada and Mexico and offered the possibility of excluding other allies.

"I would bet on IT stocks, especially mid-caps, because valuations are low and strong earnings are expected," Rudramurthy added.

The Nifty IT index was up 0.6 percent with Tech Mahindra trading 1.6 percent higher. Tata Consultancy Services Ltd was up 0.8 percent.

The Nifty was up 0.17 percent at 10,260 as of 0608 GMT, while the Sensex was 0.12 percent higher at 33,390.51.

Both the indexes are down nearly 2 percent for the week and are on track for their biggest weekly fall in four.

Construction firm H.G. Infra Engineering Ltd fell as much as 6.4 percent to 252.70 rupees on its market debut.

GTL Infrastructure Ltd hit lower circuit of 20 percent after the company said the impact of Aircel's insolvency will be materially adverse for the company.

(Reporting by Arnab Paul in Bengaluru; Editing by Vyas Mohan)