By Indranil Sarkar and Manvi Pant
BENGALURU (Reuters) -Indian shares hit fresh highs for the sixth consecutive session on Thursday, as automakers surged on hopes that the state of Karnataka would offer cuts and incentives for the clean mobility sector, while gains in metals added to the rally.
The Nifty 50 closed 0.81% higher at 26,216.05 points, while the BSE Sensex surged 0.78% to 85,836.12.
The blue-chip indexes added 3.3% and 3.5%, respectively, in the past six sessions after a big rate cut from the Federal Reserve on Wednesday boosted hopes of higher foreign inflows into emerging markets, like India.
“The market undertone remains strong and no major downside is expected in the near term,” said Siddharth Sedani, head of equity advisory at Anand Rathi Financial Services.
The auto index surged 2.3% to a record high, with Maruti Suzuki up 4.7%, Tata Motors rising 3.1% and Mahindra and Mahindra climbing 2.9%.
Reuters reported on Wednesday that Karnataka state, which racks up India’s third-highest sales of electric vehicles, would offer tax cuts and incentives for the clean mobility sector.
Plans of a tax cut in hybrid cars is boosting gains for the likes of Maruti Suzuki as the market anticipates higher demand in Karnataka as seen post a similar tax cut in the state of Uttar Pradesh in July, said Amit Hiranandani, automobile sector lead analyst at brokerage SMIFS.
Metals jumped 2.1% amid a surge in global prices as top consumer China pledged additional measures to spur its economic growth. [MET/L]
Growth in the Chinese economy would aid a decline in low-priced steel imports from China in countries including India, which would lift local prices of the metal, two analysts said.
Later in the day, Fed Chair Powell and other key officials’ comments will be scrutinized for cues on the central bank’s next move.
(Reporting by Manvi Pant and Indranil Sarkar in Bengaluru; Editing by Sonia Cheema, Savio D’Souza and Sumana Nandy)
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