Indian shares rebound on easing US rate concerns, eyes on Middle East

BENGALURU, Oct 10 (Reuters) - Indian shares rebounded on Tuesday, in line with global stocks on easing U.S. rate worries, while investors kept tabs on the military conflict in the Middle East.

The NSE Nifty 50 index (.NSEI) was up 0.53% at 19,616.15 as of 10:25 a.m. IST, and the S&P BSE Sensex (.BSESN) rose 0.56% to 65,874.50.

Twelve of the 13 major sectoral indexes logged gains. High weightage financials (.NIFTYFIN) rose 0.5% while public sector banks (.NIFTYPSU) rebounded from the previous sessions loss, adding over 1.3%.

Realty index (.NIFTYREAL) climbed 3% following a 3% jump in Phoenix Mills (PHOE.NS) on a strong quarterly update.

Auto stocks (.NIFTYAUTO) added 1.25%, led by a 2% rise in Tata Motors (TAMO.NS) after CLSA projected a rise in its fiscal 2025 profit on the back of improved sales volumes.

The more domestic-focussed small- and mid-caps outperformed the blue-chips, rising nearly 1% each.

“With the valuations in industrials, consumer discretionary, mid- and small-caps being at a premium to their long period averages, we expect sector rotation in Indian equities to continue,\” analysts at Motilal Oswal Financial Services wrote in a note.

“Valuations will become the most important driver for stock picking,\” they added.

Wall Street equities closed higher overnight after two U.S. Federal Reserve officials said further rate hikes may not be needed, easing rate concerns. Asian markets edged higher.

Meanwhile, military clashes between Israel and Hamas weighed on risk sentiment, spurring purchase of safe-haven assets like gold and the U.S. dollar.

Brent crude futures hovered around $88 per barrel on Tuesday.

Adani Ports (APSE.NS) rose 3%, rebounding from a nearly 5% slide on Monday on worries over the conflict in Israel, where the company owns a major port.

Mazagon Dock Shipbuilders (MAZG.NS) climbed 7% on signing letter of intent with a European client to construct multi-purpose hybrid power vessels.