Indian stocks rebound as inflation worries ease and auto stocks gain


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

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BENGALURU, June 23 (Reuters) – Indian stocks rose 1% on Thursday as falling crude oil prices eased worries about imported inflation and investors recovered auto stocks after recent declines.

The NSE Nifty 50 Index (.NSEI) rose 1% to 15,576.1 at 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 lower, especially oil, and that’s relatively good for India as it’s largely an importer. That could have a positive impact on domestic inflation,” he said. Narendra Solanki, Head of Research at Anand Rathi Investment Services.

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Brent futures fell more than 2% as investors recalibrated assessments of recession risk and fuel demand.

The US Federal Reserve is not trying to engineer a recession to stop inflation, but is fully committed to bringing prices under control even if it risks causing a slowdown, its chief Jerome Powell said on Wednesday. Read more

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

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

As valuations are starting to look attractive, auto stocks have done well, especially with falling metal prices, said Solanki of Anand Rathi Investment.

Financials also rose, with the Nifty Bank Index (.NSEBANK) up 1.7%.

Shares of Quess Corp (QUEC.NS) rose 4.1% after the company announced it would buy all the shares of the Allsec Technologies (ALLS.NS) unit it does not own for 1, 86 billion rupees ($23.77 million). Allsec shares jumped nearly 14% to their highest level in more than two weeks.

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Reporting by Tanvi Mehta in Bangalore; Editing by Shailesh Kuber and Subhranshu Sahu

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