Sensex edges up; caution prevails ahead of Yellen speech

(Reuters) - Indian shares crept up on Wednesday, led by drug maker Aurobindo Pharma Ltd after stellar quarterly results, but sentiment remained edgy as investors awaited further clues on whether the Federal Reserve will raise U.S. interest rates this year.

Investors' attention now is on Fed Chair Janet Yellen's speech at the annual central bank symposium in Jackson Hole on Friday. They still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that view.

Reflecting the caution, Asian stocks consolidated recent gains on Wednesday, while oil prices slid after a surprise buildup in U.S. crude stocks.

 

Sentiment was also muted ahead of the expiry of the derivative contracts on Thursday.

"If there is some indication that the U.S. economy is in good shape and recovery is on track, then there could be some impact on Indian stocks but the market isn't expecting any immediate hike in U.S. interest rates because of global economic uncertainty," said U.R. Bhat, managing director of Dalton Capital, a unit of U.K. investment management firm Dalton Strategic Partnership.

The benchmark BSE Sensex <.BSESN> was 0.16 percent higher at 28,035.41 as of 0520 GMT, while the broader NSE Nifty <.NSEI> was up 0.13 percent at 8,642.99.

Aurobindo Pharma rose as much as 5.6 percent after the company on Tuesday reported a 24 percent rise in its June-quarter consolidated profit, boosted by higher sales.

Among losers, Idea Cellular fell 2.7 percent after the country's No. 3 mobile phone carrier on Tuesday denied a news report that it was in exploratory talks about a merger with larger rival Vodafone India.

Welspun India plunged about 10 percent and headed for its third straight fall, as the fallout from Target Corp's decision to terminate business with the firm for passing off cheap sheets as premium Egyptian cotton escalated.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Subhranshu Sahu)