Indian shares rose for the fourth straight session on Thursday, buoyed by the prospect of two rate cuts by the Federal Reserve this year amid brewing tariff concerns.
The NSE Nifty 50 gained 1.24% to close at 23,190.65, while the BSE Sensex rose 1.19% to 76,348.06. This is the Nifty’s first close above 23,000 points since February 13.
All 13 major sectors advanced, with financial and IT stocks, which have higher foreign investor holdings, leading the pack.
On Wednesday, the Fed kept interest rates unchanged, but stuck to its projection of two rate cuts despite tariff threats.
“Markets cheered the unchanged dot plots as the Fed now anticipates a transitory impact of tariffs – mainly on inflation,” JM Financial said in a note.
Lower U.S. interest rates make emerging markets, such as India, more attractive to foreign investors by weakening the dollar and lowering Treasury yields.
“With the Fed maintaining its rate cut forecast, foreign outflows, which have been moderating in March, could reverse direction,” said Surendra Goyal and Vijit Jain, analysts at Citi Research.
Financials lead rise in Indian shares
The dollar index seems to have peaked out and U.S. equities are witnessing a growth unwind, which will be a positive for emerging markets, they added.
IT companies, which get a substantial chunk of revenue from the U.S. on Thursday, rose 1.25% on the day.
The IT index confirmed a bear market last week as concerns over U.S. economic growth triggered rating downgrades for multiple stocks.
The mid- and small-caps rose about 0.7% each.
Meanwhile, wire and cable makers fell after the Adani Group announced its expansion into the sector, less than a month after UltraTech Cement’s entry.
KEI Industries and Polycab India slumped 13.5% and 6.5%, respectively, and were among the worst hit within the segment.
Paytm parent One 97 Communications dropped 3.8% on a smaller-than-expected incentive from the government for low-value UPI transactions.
Comments
Comments are closed for this article.