Metals, auto power rise in Indian shares; volatility eases after recent spike

A bird flies past the Bombay Stock Exchange building in Mumbai

By Hritam Mukherjee and Bharath Rajeswaran

BENGALURU (Reuters) -Indian shares advanced on Tuesday, led by metal and auto stocks, while volatility eased after a recent rise ahead of key U.S. inflation data.

The blue-chip NSE Nifty 50 rose 0.51% to 22,217.85, while the S&P BSE Sensex settled 0.45% higher at 73,104.61.

Eleven of the 13 major sectors rose on the day. The metal index jumped 2.77%, with 14 of the 15 constituents logging gains.

Jindal Steel & Power added 4.15% and hit a record high after its quarterly profit after tax doubled.

Hindalco Industries rose 2.08% after the aluminium and copper producer's unit Novelis made public its filing for a U.S. IPO.

"We maintain buy-on-dip strategy with a preference for large-caps over small- and mid-caps," said Jitendra Gohil, chief investment strategist, Kotak Alternate Asset Managers.

Reliance Industries, the second-heaviest Nifty 50 stock, gained 1.24% while Adani group stocks climbed between 1.7% and 5.6%.

The IT index rose marginally, reversing intraday losses, ahead of key U.S. inflation data on Wednesday.

Volatility in Indian markets, which rose for 13 straight sessions on concerns over election results and sustained foreign selling, eased on the day, but was still near 19-month high levels hit in the previous session.

"The recent spike in volatility forced some traders to reduce exposure to risky positions with leverage; this shakeup is healthy as it helped trim excessive froth," Gohil said.

Auto stocks gained 1.83%, logging their best session in five weeks.

Industry body Society of Indian Automobile Manufacturers (SIAM) said that all segments posted growth in April, driven by positive consumer sentiment.

Mahindra & Mahindra and Hero MotoCorp rose 3.92% and 3.23%, respectively, and were among the top three Nifty 50 gainers.

The broader, more-domestically focussed small- and mid-caps advanced about 2% and 1%, respectively, outperforming the benchmarks.

Cochin Shipyard and Rail Vikas Nigam, surged 12.4% and 7.1%, respectively, on order wins.

(Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema)