Banking, auto boost set Indian shares for the first weekly gain of three

Bombay Stock Exchange (BSE) Building in Mumbai, India, February 1, 2022. REUTERS / Francis Mascarenhas

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BENGALURU, June 24 (Reuters) – Financials and automakers on Friday lifted a set of blue-chip indexes for their first weekly gain in three, as well as commodity prices on a slide in some respite from broadening inflationary pressures.

The price drop in commodities has caused some relief in equities and energy and food has been the driver of inflation.

The NSE Nifty 50 index (.NSEI) was up 0.71% at 15,666.75, as of 0458 GMT, while the S&P BSE Sensex (.BSESN) climbed 0.66% to 52,610.61. If gains hold, the blue-chip indexes are more than 2.5% of post-weekly gains.

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“US recessionary fears are still at the forefront, but the slide in commodity prices has lifted sectors such as automakers and FMCG in India on marginal pressures,” said Ajay Bodke, an independent market analyst.

Prices of copper, a bellwether with economic output for its wide range of industrial and construction uses, are headed for their worst week in a year, while oil prices have slid on concerns over a slowdown in demand.

“Crude prices will continue to rise, with any rebound in oil to $ 120 levels in terms of concerns about macroeconomic conditions to return to haunt investors,” Bodke said.

Cheaper oil tends to benefit oil-importing countries such as India.

Still, weakening growth momentum, depreciation in the rupee and strong domestic inflows could mean that foreign investors may not be able to return to a rush in Indian equities, Societe Generale analysts wrote in a note dated Thursday.

Indian equities worth $ 5.62 billion so far this month, already surpassing outflows of $ 5.18 billion from May.

The Nifty Auto index (.NIFTYAUTO) climbed 1.6% to a three-week high after jumping 4.4% in the previous session, while the Nifty FMCG index (.NIFTYFMCG) advanced 1.5%.

The Nifty Bank index (.NSEBANK) rose as much as 1.7%, led by a 3.9% jump in private-sector lender IndusInd Bank (INBK.NS).

Shares of ONGC (ONGC.NS) climbed 4.6% after the oil explorer said its unit was hit by an onshore block of Colombia.

Hero MotoCorp (HROM.NS) rose 3.5% to an over three-week high after a two-wheeler maker said it would be hit by hike prices of up to 3,000 rupees over the counter.

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Reporting by Chris Thomas in Bengaluru; Additional reporting by Gaurav Dogra; Editing by Shailesh Kuber and Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.

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