By Bharath Rajeswaran
(Reuters) -Indian shares recovered on Tuesday, led by financials, after logging their worst losing streak in a year amid escalating conflict in the Middle East.
The Nifty 50 index was up 0.49% at 24,916.2 points as of 10:37 a.m. IST, while the S&P BSE Sensex added 0.47% to 81,430.22. The indexes had slipped marginally earlier in the session.
The benchmarks fell in each of the last six sessions as escalating Middle East tensions sapped risk appetite and foreign institutional investors sold shares worth $6 billion.
The Nifty 50 has fallen 5.6% from its record high hit on Sept. 27, while volatility has risen to a one-month high.
“We do not think that the recent drop signifies a long-lasting period of underperformance for Indian equities,” Nomura said in a note.
“The structural story of India remains attractive and should valuations revert to more palatable levels, investors will look to re-enter the market.”
Investors await the central bank’s policy decision on Wednesday and corporate earnings that kick off this week.
The central bank is widely expected to hold rates at its meeting but some expect an easing of the policy stance.
On Tuesday, ten of the 13 major sectors advanced.
High weightage financials rose 1%, with analysts attributing the rise to their relatively attractive valuations.
The broader, more domestically-focussed small- and mid-caps rose about 1% each.
Automaker Mahindra & Mahindra gained 1.7% after CLSA upgraded the stock to “outperform” from “hold”, citing gains from improved scale, superior product mix and better pricing power in sports utility vehicles.
Peer Tata Motors lost 2% after its unit JLR’s September-quarter retail sales fell 3% year-on-year. It was the top Nifty 50 loser by percentage.
Construction company Skipper gained 8% after Nuvama initiated coverage of the stock with a “buy” rating, citing likely growth in earnings due to a rise in transmission and distribution capex.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Sonia Cheema)
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