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Indian market wrap: Shares rise as crude oil jump lifts risk sentiment

MUMBAI (NewsRise) -- Indian shares rose to three-week highs Tuesday, tracking regional equities, as risk appetite improved on the back of steadying crude oil prices.

The benchmark BSE Sensex ended 0.47% higher at 25,773.61 points, the highest levels since April 27. The index is down 1.3% in 2016 so far. The broader NSE Nifty50 index advanced 0.38% to 7,890.75 points.

Oil and Natural Gas Corp. led gains on the Sensex, while private lenders Axis Bank and ICICI Bank recovered from yesterday's decline, and Asian Paints and Larsen & Toubro also rose. Adani Ports & Special Economic Zone, Hindustan Unilever and NTPC declined.

Global risk appetite improved after crude prices jumped to six-month highs Monday. U.S. equities advanced one percent in the previous session, while European indexes rose 0.88% Tuesday.

Recent supply disruptions in Nigeria, Canada and Venezuela have supported crude prices this month. Nigeria's oil minister on Monday said the nation's oil output had slipped to its lowest in decades after militant attacks in the Delta region.

The benchmark Brent crude oil contract rose 2.4% overnight and was last trading down 0.14% at $48.90 per barrel.

Other Asian markets also rose. Japan's Nikkei 225 and Hong Kong's Hang Seng advanced 1.13% and 1.18%. South Korea's KOSPI eked out a 0.09% gain, while China's Shanghai Composite ended 0.25% lower.

Local sentiment improved after exit polls indicated a victory for Prime Minster Narendra Modi's Bharatiya Janata Party in the northeastern state of Assam for the first time. The Modi-administration's ability to push ahead with reforms hinges heavily on state-election wins as it lacks a majority in the upper house of Parliament.

Lawmakers' tally in the upper house is determined by the political parties controlling the states and more states under the BJP administration, the greater its chances of raising share in the upper house.

On the Sensex, 19 of the 30 constituents ended higher, and overall advancing issues outnumbered declining ones 1,304 to 1,301 and 181 closed unchanged.

"The market has been on an uptrend since early March and corrections on the downside have been relatively minor and have not been able to sustain," said Kishor Ostwal, Managing Director at CNI Research. "The earnings season, barring the banking space, has not seen any major disappointments and this has also helped sentiment."

Private lenders Axis and ICICI recovered from yesterday's decline, advancing 3.32% to 503 rupees and 1% to 226.25 rupees. Banking stocks came under pressure yesterday after a host of state-owned lenders, led by Bank of Baroda, on Friday reported losses for the March quarter on increased provisioning.

Bank of Baroda extended Monday's over 8% slide to fall another 0.32% to 141.75 rupees.

The nation's largest lender State Bank of India, due to report earnings later this month, ended little changed at 177.05 rupees.

ONGC, India's largest oil and gas explorer and producer, was the best performing stock on the Sensex on the back of higher crude prices, gaining 3.72% to 210.35 rupees.

Housing Development Finance Corp. rose to its highest level in over four months, advancing 2.44% to 1,216.25 rupees Tuesday. The stock has traded with an upward bias since its March quarter earnings, but profit taking dragged it lower late last week.

The housing finance provider, which reported earnings earlier this month, is up almost 12% in May.

Engineering major Larsen & Toubro snapped a three-session over 3% decline to gain 0.79% to 1,293.40 rupees. Disappointing industrial output data for March has weighed on the capital goods sector recently.

Asian Paints ended 1.92% higher at 969.90 rupees. The paint maker has advanced for five consecutive sessions to new lifetime highs after it reported robust fourth-quarter earnings.

Motherson Sumi Systems jumped 8.36% to 290.45 rupees after the auto component manufacturer reported better-than-expected quarterly earnings on Tuesday. The company's net profit rose 22%.

Domestic automakers also participated in today's gains, with Mahindra & Mahindra and Maruti Suzuki India gaining 1.75% to 1,341.40 rupees and 1.77% to 3,949.15 rupees.

Adani Ports fell 1.29% to 183.40 rupees. The port operator is trading close to its lowest levels in 2016 amid disappointing cargo growth in its March quarter and increasing concern over its borrowings.

Hindustan Unilever ended 1.38% lower at 834.80 rupees. The consumer goods major rose 1.8% yesterday, while energy conglomerate NTPC fell for the fourth session, sliding 2.18% to 137.05 rupees.

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