Indian shares kicked the week off on a positive note as U.S. Federal Reserve Chair Jerome Powell hinting at an interest rate cut buoyed prospects for risk assets globally.
The Nifty 50 rose 0.39% to 24,967.75 points and the BSE Sensex added 0.4% to 81,635.91.
Powell pointed to a possible September interest rate cut in his Jackson Hole Symposium speech on Friday, saying that risks to the job market were rising, even as he noted that inflation remained a threat and that a decision wasn’t set in stone.
Lower U.S. rates make financial assets in emerging markets, such as India, more appealing to foreign investors.
MSCI’s broadest index for Asia-Pacific stocks outside Japan rose 1.4% on the day.
In India, ten of the 16 major sectors advanced, with information technology stocks rising 2.4% to lead the gainers. IT companies get a substantial chunk of their revenue from the U.S.
Indian share benchmarks open lower, led by financials, IT stocks
The top four Nifty 50 percent gainers were all IT companies, with India’s two biggest software exporters, Tata Consultancy Services and Infosys, jumping 2.8% and 3.1%, respectively.
Metal stocks gained 0.7% as rate cut hopes weighed on the dollar and aided metal prices.
Investors remained cautious as U.S. President Donald Trump’s dditional 25% tariffs on Indian goods are set to take effect on August 27, which will increase the total levies to up to 50%.
India’s broader, more domestically-focused midcaps and smallcaps erased early gains to end little changed.
“The likelihood of a negotiated settlement is fading and the final effective tariff of 50% cannot be ruled out,” Emkay Global Financial Services said.
Paper makers soared, with JK Paper and West Coast Paper Mills jumping 17.4% and 13.8%, respectively, after the government imposed a minimum import price on virgin multi-layered paper board.
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