Indian shares edged higher on Thursday, driven by strong auto sector earnings, even as global uncertainty over U.S. interest rates and rising oil prices weighed on broader sentiment. The Nifty 50 rose 0.28% to 24,317.15, while the BSE Sensex added 0.35% to 77,928.15, with auto stocks leading the charge. Main Developments The auto index gained 1.6%, propelled by upbeat June quarter results. Mahindra & Mahindra climbed about 2%, while Balkrishna Industries surged 10.8%. The IT index added 0.2%, extending its weekly rise to approximately 8.4%, as India benefited from unwinding of the AI-driven rally in U.S. and Asian markets. Eleven of the 16 major sectors advanced, though broader small-caps and mid-caps fell 0.6% and 0.4%, respectively. Dabur India dropped 1.8% after brokerages flagged tepid underlying growth. Sun Pharma hit a record high after securing Brazilian regulatory approval for a semaglutide injection. Brent crude added 0.3% to $91 a barrel, following a 7.9% surge in the previous session on escalating Mideast hostilities. Read also: BoE Holds Rate at 3.75%, Warns US-Iran War Will Reignite Inflation Background The U.S. Federal Reserve's latest decision drew dissent from three of the 12 rate-setting committee members, a level of disagreement not seen for a new Fed chair since the 1970s. “The presence of multiple dissents in favour of a rate hike underscores that the Fed is not yet ready to declare victory over inflation, implying that higher interest rates could persist for longer,” said Rajesh Palviya, head of research at Axis Direct. Asian stocks were subdued following the Fed's move, while Indian bonds drifted sideways as traders tread cautiously. The rupee ended little changed. India's equity market has relatively low direct exposure to semiconductor and pure-play AI companies, making it a hedge against a wider AI-led selloff. The IT index has gained 18.6% in July, on track for its biggest monthly rise in six years. Why It Matters The rally in Indian auto stocks highlights a divergence: domestic earnings strength is pushing shares higher even as global headwinds—higher oil prices from Mideast tensions and a hawkish Fed—threaten to cap gains. For investors, India's limited AI exposure offers a buffer against tech-driven volatility elsewhere, but rising crude costs could pressure import-dependent sectors. What's Next Markets will watch for further Fed signals and oil price movements, as Brent crude remains elevated near $91 a barrel due to ongoing Mideast hostilities. The IT sector's July gains, if sustained, could mark its best monthly performance in six years, while auto stocks will likely remain in focus as more quarterly results emerge.