Autos lead rise in Indian shares; Fed, oil cap gains

Indian shares inched higher on Thursday, as auto stocks gained on upbeat quarterly results, while uncertainty over the U.S. interest-rate outlook and higher oil prices capped the upside.

Asian stocks were subdued following the U.S. Federal Reserve decision, which drew dissent from three of the 12 members of the rate-setting committee.

No Fed Chair before Kevin Warsh has faced this degree of dissents so early in their tenure since the 1970s.

“The presence of multiple dissents in favour of a rate hike underscores that the Fed is not yet ready to declare victory over inflation, implying that higher interest rates could persist for longer,” said Rajesh Palviya, head of research at Axis Direct.

India’s benchmark Nifty 50 rose 0.28% to 24,317.15, while the BSE Sensex added 0.35% to 77,928.15.

The rupeeended little changed, while Indian bonds drifted sideways as traders tread cautiously after the U.S. rate pause.

Auto index gained 1.6%, led by about 2% rise in Mahindra & Mahindra and 10.8% jump in Balkrishna Industries after upbeat June quarter results.

IT index added 0.2%, to take its weekly rise to about 8.4%, benefitting from the unravelling of the AI-driven rally across U.S. and other Asian markets.

India is seen as a relative hedge against a wider AI-led selloff as its equity market has far less direct exposure to semiconductor and pure-play AI companies.

IT index has gained 18.6% in July, on course for its biggest monthly rise in six years.

Eleven of the 16 major sectors advanced. The broader small-caps and mid-caps fell 0.6% and 0.4%, respectively.

Among stocks, Dabur India dropped 1.8% as brokerages flagged tepid underlying growth and lack of earnings catalysts.

Sun Pharma hit a record high after getting approval from Brazil’s health regulator for semaglutide injection.

Brent added 0.3% to $91 a barrel after rising 7.9% in the previous session on escalating Mideast hostilities.