Indian shares hit 7-week high on Russia-Ukraine talks optimism

BENGALURU (Reuters) - Indian shares scaled a near seven-week high on Wednesday, boosted by automakers and heavyweight financials, with appetite for riskier assets rebounding globally on signs of progress in Ukraine-Russia peace talks.

The NSE Nifty 50 index climbed 1% to 17,498.25, while the S&P BSE Sensex rose 1.3% to 58,683.99, extending a rally to a third straight session.

Global equity markets largely reacted positively to Russia's promises on Tuesday to scale down its military operations near Kyiv and surrounding cities. [MKTS/GLOB]

"Some recovery is visible in the market from the oversold zone, led by key drivers like peace talks between Russia-Ukraine," said Neeraj Chadawar, head - quantitative equity research, Axis Securities.

India's main indexes have more than recovered their losses triggered by a spike in oil prices following Russia's invasion of Ukraine. In contrast, MSCI's broadest index of Asia-Pacific shares outside Japan is still nearly 4% below levels seen before the invasion.

"In the near term, market performance is likely to be range-bound as the clear trend is likely to emerge only after the volatility sustains at current levels for a longer time," Chadawar said.

In Mumbai, the Nifty Auto index gained 1.2%, while the Nifty bank index rose 1.4% and Nifty finance index advanced 2%.

Tata Consumer Products rose 3.1% after saying it would merge Tata Coffee with itself. Tata Coffee shares surged 9.3% to a two-month high.

Oil and Natural Gas Corp slid 5.3% to a two-week low after the oil producer said India would sell a stake of up to 1.5% in the company.

Citigroup Inc said, after Indian markets closed, that it would sell its Indian consumer banking businesses to private lender Axis Bank for $1.6 billion.

(Reporting by Chris Thomas and Nallur Sethuraman, additional reporting by Gaurav Dogra in Bengaluru; Editing by Sriraj Kalluvila)