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 US yields.

The NSE Nifty 50 index settled 0.56 per cent higher at 19,545.75, while the S&P BSE Sensex climbed 0.62 per cent to 65,631.57.

Asian equities edged higher, while Wall Street rose overnight as US 10-year yields eased from a fresh 16-year high.

Concerns over global demand led to a 5 per cent drop in oil prices, helping importers like India.

“The triple whammy of spiking dollar, US 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 per cent and 0.99 per cent, respectively.

The IT index has fallen nearly 5 per centin the last two weeks on worries of prolonged higher interest rates in the US

The more domestically focussed small-caps mirrored the blue-chips, adding 0.63,per cent 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 per centand hit a new record high on multiple order wins. Sobha climbed 6.48 per cent after it reported record sales for the second quarter.