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India shares post weekly gains as automakers advance

ITC, Hindustan Unilever also rise on positive demand outlook

MUMBAI (NewsRise) -- Indian shares outperformed their regional peers this week, as automakers and consumer goods companies gained, helping ease concerns over the impact of a U.S.-China trade dispute.

The BSE Sensex rose 0.7% this week and the Nifty 50 Index added 0.5%, after rising 0.2% each on Friday to 35,657.86 and 10,772.65, respectively.

Two-wheeler maker Bajaj Auto was the top performer this week, climbing 7.5% after reporting a 65% on-year jump in sales last month. Maruti Suzuki India rallied 5.5% after the carmaker posted a 36% increase in total sales in June. Hero MotoCorp added 4.7% after June sales increased 13% from a year earlier. Consumer goods companies ITC and Hindustan Unilever rose 2.3% each, buoyed by Indian government approval for higher minimum support prices for summer sown crops to farmers, which boosted the outlook for rural demand.

Among major losers this week, Vedanta fell 6.9% and aluminium and copper producer Hindalco Industries declined 4.4% amid an increasingly worrisome outlook for industrial commodities due to the U.S.-China trade disputes. Bharti Airtel has fallen 5% since last Friday amid concerns over intensifying pricing pressures in the Indian telecom industry.

On Friday, Bajaj Auto added 1.8%, Maruti Suzuki shed 0.4% and Hero jumped 4.3%. ITC ended unchanged while Hindustan Unilever edged 0.3% lower. Vedanta declined 0.7%, Hindalco fell 0.5%, and Bharti finished 0.1% lower.

A week in which attention was wholly-focused on the extent to which the U.S.-China trade dispute could deteriorate, major Asian indexes witnessed declines, with the Nikkei Asia300 Index of companies outside Japan falling 2.1% for the week. On Friday, U.S. tariffs on $34 billion worth of Chinese imports came into effect and President Donald Trump said more could follow if Beijing were to retaliate. After weeks of rhetoric and threats by Trump over China's alleged unfair trade practices, Friday marked the first time actual policy action by U.S. came into effect against Beijing.

China retaliated with extra duties on $34 billion of U.S. imports and the country's Ministry of Commerce called it the initiation of the largest trade war in economic history. It said Beijing will safeguard the country's core interests.

"The outlook on Indian equities remains positive irrespective of how the global space plays out, considering the upbeat earnings outlook," said Kishor Ostwal, managing director at Mumbai-based CNI Research. "India is not as much dependant on the Chinese economy as other Asian economies."

Among movers on the BSE on Friday, Tata Motors advanced 3.7%, rebounding from Thursday's selloff triggered by unit Jaguar Land Rover's warning about the impact of a hard Brexit.

Reliance Industries also recovered from losses in the previous session following its annual general meeting, adding 1.2%. IDFC Securities said Thursday's announcement of the company's launch of broadband services has potential to disrupt pricing in the sector.

Fuel retailers ended higher after Brent crude prices headed for a second day of decline on Friday. Bharat Petroleum advanced 1%, Hindustan Petroleum gained 4.6%, and Indian Oil climbed 0.9%.

Varroc Engineering closed at 1,040.55 rupees on its debut on the stock exchange compared with its IPO price of 967 rupees.

--Nimesh Vora

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