Indian shares gain as dip in crude, US bond yields lift mood
Indian shares advanced on Thursday, led by gains in tech and financial stocks as part of a relief rally triggered by an easing of crude prices and a dip in U.S. yields.
The NSE Nifty 50 index settled 0.56% higher at 19,545.75, while the S&P BSE Sensex climbed 0.62% to 65,631.57.
Asian equities edged higher, while Wall Street rose overnight as U.S. 10-year yields eased from a fresh 16-year high. [MKTS/GLOB]
Concerns over global demand led to a 5% drop in oil prices, helping importers like India.
"The triple whammy of spiking dollar, U.S. bond yields and crude prices is slowly easing, paving the way for a recovery in markets," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
Eight of the 13 major sectoral indexes advanced, with high weightage financials and information technology adding 0.51% and 0.99%, respectively.
The IT index has fallen nearly 5% in the last two weeks on worries of prolonged higher interest rates in the U.S.
The more domestically focussed small-caps mirrored the blue-chips, adding 0.63%, while the mid-caps closed flat.
"Valuations are overstretched in small- and mid-caps and strong earnings are necessary to justify the elevated prices," said Raghvendra Nath, managing director at Ladderup Wealth Management.
Brokerage Goldman Sachs also advised investors to shift to large-caps ahead of India's general elections and remain cautious on small- and mid-caps after the recent rally.
Analysts said the Reserve Bank of India's policy decision and commentary on Friday, September-quarter earnings, consumption boost due to festive demand and the Cricket World Cup will influence the market's trajectory.
Among individual stocks, Larsen & Toubro gained over 2% and hit a new record high on multiple order wins.
Sobha climbed 6.48% after it reported record sales for the second quarter.
($1 = 83.2025 Indian rupees)
