Financials power Indian shares; Nifty 50 in overbought zone

BENGALURU, May 29 (Reuters): Indian shares advanced on Monday, led by an uptick in financials while improved global cues due to a weekend debt ceiling deal in the US added heft.
The blue-chip Nifty 50 index closed 0.54 per cent higher at 18,598.65, while the benchmark S&P BSE Sensex rose 0.55 per cent to 62,846.38. Both benchmarks closed at five-month highs for the second session in a row.
Technical indicators showed the Nifty 50 moved to the overbought zone on Monday, implying a potential slide in the near term. The benchmark is nearly 300 points away from its record-high levels.
"Nifty looks set for a new high after the consolidation breakout," said Ajit Mishra, vice president - research at Religare Broking. Analysts had expected Nifty to trade in the 18,050-18,450 range, ahead of the recent rally.
"Focus should remain on identifying the leaders across sectors instead of adding laggards in the hope of recovery."
Eleven of the 13 sectoral indexes logged gains, with the high-weightage financials rising 0.84 per cent.
ICICI Lombard General Insurance Ltd surged over 8 per cent after ICICI Bank's board approved raising its stake in the company by 4 per cent.
Auto index rose 0.63 per cent powered by a nearly 4 per cent gain in Mahindra & Mahindra Ltd. The stock, second heaviest in the auto index, was the top gainer on the Nifty 50 after reporting a rise in March-quarter profit.
Among individual stocks, drugmaker Lupin Ltd gained over 3 per cent to hit a 15-month high after its Canada subsidiary received approval to market a generic version of its pulmonary disease drug.
Shares of Oil & Natural Gas Corporation Ltd fell nearly 3 per cent after reporting a loss in the fourth quarter.
Sentiment improved after US President Joe Biden and House Speaker Kevin McCarthy forged an agreement over the weekend to suspend the $31.4 trillion debt ceiling until 2025, ahead of the June 1 deadline.
The deal will have to pass through the US Congress.