Indian stocks soar as automakers enjoy best day in over two years

Indian stocks soar as automakers enjoy best day in over two years

People walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, Nov. 4, 2020. REUTERS/Francis Mascarenhas

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BENGALURU, June 23 (Reuters) – Indian stocks endured a broader downturn on Thursday as weak metal and oil prices propelled slain automakers to their best day since April 2020.

The NSE Nifty 50 Index (.NSEI) rose 0.93% to 15,556.65, while the S&P BSE Sensex (.BSESN) climbed 0.86% to 52,265.72.

Indices are up about 1.7% so far this week, after two consecutive weeks of decline, fueled by concerns about rate hikes and growth.

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Sentiment on Thursday was helped by a further decline in crude prices as investors assess recession risks and the impact of higher tariffs on fuel demand. Cheaper oil usually benefits oil-importing countries like India.

β€œThe drop in crude oil prices has calmed the market, although concerns about continued foreign investor sales and rising US bond yields will keep traders on their toes,” said Shrikant Chouhan, chief of equity research (retail) at Kotak Securities. †

Analysts also said comments from the central bank that inflation is expected to fall to 4% in 2023-24 supported sentiment. read more

The Nifty Auto Index (.NIFTYAUTO) was the best-performing sub-index, rising 4.4%. Concerns about a recession have pushed metal prices sharply down, giving automakers a boost that has been struggling for several quarters with rising input costs.

The auto index was down about 6% this month, until its last close.

India’s largest automaker Maruti Suzuki (MRTI.NS) took the biggest gains on the Nifty 50, rising 6.3% to its highest since late February. Truck maker Eicher Motors (EICH.NS) and two-wheeler maker Hero MotoCorp (HROM.NS) were each up 5.9%.

Bajaj Auto (BAJA.NS) rose 4.1% after the two- and three-wheeler manufacturer said Monday it was considering a share buyback after the proposal was delayed last week.

Route Mobile (ROUT.NS) also rose 8.5% on share repurchase plans.

India’s largest company, Reliance Industries (RELI.NS) fell for the second day in a row, finishing 1.6% lower and capping profits on the Nifty.

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Reporting by Chris Thomas in Bengaluru; Editing by Devika Syamnath

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