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Indian shares end higher on hopes of Fed rate hike pause

June 06, 2023 00:00:00

BENGALURU, June 5 (Reuters): Indian shares settled higher on Monday, propped by sustained gains in auto stocks and on stronger bets that the Federal Reserve may skip an interest rate hike later this month.

The blue-chip Nifty 50 index closed 0.32 per cent higher at 18,593.85, while the benchmark S&P BSE Sensex finished 0.38 per cent up to 62,787.47.

Both the indexes registered their second-straight weekly gain on Friday, lifted by stronger-than-expected economic growth data and fast-paced expansion of the country's factory output.

"The Nifty has a strong support around 18,200 level, while an immediate resistance is at around 18,700 we expect some consolidation at those higher levels in the next few weeks with the index possibly testing all-time high levels," said Neeraj Dewan, an independent market analyst. The index has scaled 9.7 per cent from March lows.

The focus is on the monetary policy meetings in the US and India and the progress of monsoons as the country's economy depends on agriculture to a large extent, Dewan added.

Global shares rose on Monday on optimism the Fed would pause rate hikes this month after data showed that while the US economy added 339,000 jobs last month, wage growth moderated and the unemployment rate rose.

This week, investors will closely watch the Reserve Bank of India's monetary policy decision. The central bank is expected to leave its key interest rate unchanged on June 8 and for the rest of 2023, a Reuters poll of economists showed.

Among the 13 major Nifty indexes, autos added over 1 per cent to hit a record high for a second straight session after the May data for top automakers showed robust sales.

Mankind Pharma Ltd closed 2.9 per cent lower after the company's cough syrups such as Codistar and Tedykoff were pulled off the shelves following a ban of 14 fixed dose drug combinations over the weekend by the government, according to local media.

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