Indian shares rise as banking and auto stocks boost
Photo Credit: Reuters

Indian shares were boosted by banking and auto stocks on Monday, even as a persistent spike in new coronavirus cases weighed on investor sentiment. 

The blue-chip NSE Nifty 50 index gained 0.9% to 17,973.55 and the benchmark S&P BSE Sensex rose 0.91% to 60,288.75 by 0459 GMT. Last week was the best for both indexes since early September. 

The Nifty Auto index advanced 1.74%, adding to its more than 3% gain last week. The Nifty bank index , which underperformed the broader Nifty last year, rose 1.2%, extending its 2022 gains to more than 7%. 

"With banking stocks correcting in the last few months, PSU and private lenders are currently at attractive valuations," said Anita Gandhi, director at Arihant Capital Markets. 

The Nifty IT index rose as much as 1.26%, driven by a 3% jump in Tata Consultancy Services after the software company said it would consider a share buyback. 

Top information technology firms are slated to kick off the third-quarter earnings season from Jan. 12., Among losers, Paytm slipped 2% to 1,204.25 rupees after brokerage Macquarie cut its target price for the digital payments firm by 25% to 900 rupees. 

Meanwhile, India recorded 179,723 fresh COVID-19 infections, with the fast-spreading Omicron variant fuelling an almost eight-fold rise in daily infections since the start of the year. 

Separately, India on Friday cut its forecast for economic growth in the year to end-March to 9.2% from an earlier estimate of more than 10%. The new forecast compares with a contraction of 7.3% in 2020/21. 

Still, analysts believe even with the latest estimate, India could be one of the fastest growing economies. 

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