MUMBAI: 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 US 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.
The dollar index seems to have peaked out and US equities are witnessing a growth unwind, which will be a positive for emerging markets, they added.
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