Indian shares end higher after volatile session; inflation eyed

Bharath Rajeswaran and Hritam Mukherjee
Updated ·2-min read
Broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai

By Bharath Rajeswaran and Hritam Mukherjee

BENGALURU (Reuters) -Indian shares rebounded to settle marginally higher after a volatile session on Monday, as gains in top private lender HDFC Bank and pharmaceutical stocks offset a sharp drop in Tata Motors.

Concerns over the outcome of the ongoing national elections and sustained selling by foreign investors sent the Nifty volatility index higher for the 13th straight session. The so-called "fear gauge" added 213 basis points on Monday to 20.6, the highest since October 2022.

The blue-chip NSE Nifty 50 advanced 0.22% to 22,104.05 points, while the S&P BSE Sensex added 0.15% to 72,776.13. The indexes had dropped about 1.1% earlier in the day.

The Nifty 50 has lost about 3% in the six sessions since hitting a record high on May 3.

"The ongoing uptick in volatility ahead of election results is a given," Deven Choksey, managing director at DRChoksey FinServ said.

India's election results are due June 4.

Foreign portfolio investors have offloaded shares worth 170.83 billion rupees ($2.05 billion) in just seven sessions in May, the highest since January.

"Global money coming into India is taking a breather, ahead of election results and also because of high valuations and is going to relatively cheaper markets like China," Choksey said.

The top Nifty gainer Cipla rose 5.61% on the day. The drugmaker's upbeat margin outlook following fourth-quarter results on Friday helped pharma stocks add 1.77%.

The heaviest Nifty 50 stock HDFC Bank rose 1.21%, powering financials 0.74% higher. The top private lender last week posted its worst weekly fall in about four months.

On the flip side, top Nifty loser Tata Motors' 8.3% slide dragged auto stocks to end 1.68% lower, on margin concerns and demand worries.

India's retail inflation, which likely eased in April, is due after closing bell.

($1 = 83.5150 Indian rupees)

(Reporting by Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Nivedita Bhattacharjee, Sonia Cheema, Eileen Soreng and Mrigank Dhaniwala)

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