India stocks rise for 3rd week as Fed rate cut, US trade talks lift sentiment

India’s equity benchmarks fell on Friday as financials and IT stocks came under profit-booking, but still marked a third straight week of gains after a U.S. rate cut, local tax reductions and optimism over trade talks with Washington.

The Nifty 50 eased 0.38% to 25,327.05 and the BSE Sensex .lost 0.47% to 82,626.23 on Friday.

The two indexes added 0.9% each for the week.

Fourteen of the 16 major sectors rose for the week. The broader small-caps and midcaps gained 2.9% and 1.5%, respectively.

“We have seen a good rally in the past few sessions driven by multiple factors, indicating a marked shift in market sentiment … the overall undertone remains bullish,” said Aamar Deo Singh, senior vice president at Angel One.

The U.S. Federal Reserve cut interest rates by 25 basis points on Wednesday in a widely-anticipated decision.

Lower U.S. interest rates make emerging markets like India attractive to foreign portfolio investors, as Treasury yields and the dollar typically decline in such a scenario.

Indian shares advance on IT boost after Fed rate cut

Investors also drew support from progress in India-U.S. trade talks as officials resumed negotiations this week.

On the day, financials .fell 0.6%, ending a record 12-session winning streak, while IT slipped 0.5% after three days of gains.

Adani group companies jumped between 0.3%-12.4% after the Securities and Exchange Board of India dismissed two charges leveled against billionaire Gautam Adani and his companies by U.S.- based Hindenburg Research.

However, the market regulator is still looking into more than a dozen allegations that Adani Group and its offshore funds broke securities regulations, Reuters reported on Friday.

Among stocks, Vodafone Idea surged 7.1% on reports that government told apex court it is not opposed to the telecom operator’s plea on “adjusted gross revenue” dues.