Indian shares rebound as inflation worries ease, auto stocks gain

By Tanvi Mehta

BENGALURU, June 23 (Reuters)Indian stock rose 1% on Thursday as crude oil prices in a fall fell after concerns over imported inflation and investors scooped up auto stocks.

The NSE Nifty 50 index .NSEI rose 1% to 15,576.1 by 0515 GMT, while the S&P BSE Sensex .BSESN Also climbed 1% to 52,340.81. Both indexes fell 1.4% on Wednesday.

“Commodity prices are low, especially oil, and that is a good indicator that India is an importer. This could positively impact domestic inflation,” said Narendra Solanki, head of research at Anand Rathi Investment Services.

Brent crude LCOc1 Futures dropped more than 2% as investors recalibrated valuations of recession risks and fuel demand. O / R

The US Federal Reserve is not trying to engineer a recession to stop inflation, but it is doing a downturn, even if its fully underpriced prices are under control, its chief Jerome Powell said on Wednesday.

Meanwhile, Reserve Bank of India Deputy Governor Michael Patra wrote in the latest Monetary Policy Committee minutes that the central bank has no choice but to raise interest rates to inflation expectations.

Among Nifty, auto stocks on gainers .NIFTYAUTO jumped 3% in their biggest intraday rise in more than a month. Hero MotoCorp HROM.NS and Maruti Suzuki MRTI.NS more than 4% each.

With valuations starting to become attractive, auto stocks have done well, especially with the decline in metal prices, said Anand Rathi Investment’s Solanki.

Financials are also advanced, with the Nifty Bank Index .NSEBANK up 1.7%.

Quess Corp Of Shares QUEC.NS rose 4.1% after the company said it would buy all shares in the unit Allsec Technologies ALLS.NS it does not own 1.86 billion rupees ($ 23.77 mln). Allsec shares surged nearly 14% to hit their highest in more than two weeks.

(Reporting by Tanvi Mehta in Bengaluru; Editing by Shailesh Kuber and Subhranshu Sahu)

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The views and opinions expressed herein are those of the author and do not reflect those of Nasdaq, Inc.

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