Indian shares bounce back on easing US rate concerns, eyes on Middle East

BENGALURU, Oct 10 (Reuters) - Indian shares rebounded on Tuesday, in step with global stocks on easing U.S. rate worries, while investors kept tabs on the military conflict in the Middle East.

The NSE Nifty 50 index (.NSEI) settled 0.91% higher at 19,689.85, while the S&P BSE Sensex (.BSESN) rose 0.87% to 66,079.36.

High weightage financials (.NIFTYFIN) and banks (.NSEBANK) climbed over 1% each, while public sector banks (.NIFTYPSU) rebounded from the previous sessions loss, adding 2.08%.

Realty index (.NIFTYREAL) climbed 4.01% and hit a record high following strong business updates from key constituents and the Reserve Bank of Indias decision on Friday to keep rates unchanged.

Auto stocks (.NIFTYAUTO) added 1.24%, led by a 2.14% rise in Tata Motors (TAMO.NS) after CLSA projected a rise in its fiscal 2025 profit.

The more domestically-focussed small- (.NIFSMCP100) and mid-cap (.NIFMDCP100) indexes outperformed the blue-chips, rising over 1.2% each.

\“The outperformance of small- and mid-caps could continue further as earnings for September quarter are likely to be pretty good,\” said Atul Suri, chief executive of Marathon Trends PMS.

\“Strong macroeconomic fundamentals and festive demand could support the shares,\” Suri added.

The International Monetary fund raised Indias economic growth forecast for this fiscal to 6.3% from 6.1% earlier, citing stronger-than-expected consumption.

Meanwhile, military clashes between Israel and Hamas weighed on sentiment, prompting purchase of safe-haven assets like gold and the U.S. dollar.

\“If the conflict between Israel and Hamas escalates to a point where it embroils major players like the U.S and Iran, it could disrupt oil supplies and spook markets,\” warned Rahul Sharma, head of technical research at Equity99.

Fed officials dovish comments helped U.S. Treasury yields ease, triggering a recovery in global markets.

Among individual stocks, Adani Ports (APSE.NS) climbed 3.73% on bullish views from CLSA and Motilal Oswal, while Coal India (COAL.NS) jumped 5.37% after Nuvama raised earnings estimates on upbeat volume growth outlook.

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee and Dhanya Ann Thoppil

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