Energy drives Indian shares higher after strong domestic growth data

Indian markets rose on Friday, powered by energy sectors, as faster-than-expected domestic economic growth and in-line US inflation data lifted mood.

Indian shares advanced on Friday, led by energy stocks, as faster-than-expected domestic economic growth and in-line U.S. inflation data boosted sentiment.

The blue-chip index NSE Nifty 50 was up 0.88% at 22,176.25, while the BSE Sensex added 0.86% to 73,123.55, as of 10:02 a.m. IST.

Ten of the 13 major sectors logged gains. The broader, more domestically focussed small- and mid-caps gained 0.6% each.

The rise comes after data showed the Indian economy grew 8.4% in the October-December quarter, the fastest pace in six quarters and also above estimates, aided by robust manufacturing and construction activity.

”India’s impressive gross domestic product (GDP) numbers provide fundamental support to the bull market,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Analysts added that in-line U.S. inflation reading also aided sentiment, as it kept intact the likelihood of a rate cut in June by the Federal Reserve.

Energy and oil and gas jumped 1.5% and 1.75%, respectively. Gains were led by oil marketing companies Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation, with each advancing about 3%.

BPCL was the top percentage gainer in the Nifty 50.

The rise comes after HSBC reiterated its ”buy” rating on the three companies and raised target prices, citing medium-term benefits from refinery upgrade, improved fundamentals and reduced government intervention.

Financials added 1%, while public sector banks gained 0.8%.

Metals climbed 2%, led by a similar increase in Hindalco Industries. CLSA upgraded the stock to ”buy” from ”underperform”, citing favourable valuations after the recent correction.

The stock has shed 18% in the first two months of 2024.

Among individual stocks, Suven Pharmaceuticals jumped 12% after the company said it would merge with Cohance Lifesciences in an all-share deal to scale up its contract and development manufacturing services business.