Indian benchmark shares inch higher, led by IT on rising odds of US rate cut

India’s benchmark stock indexes inched higher on Monday, led by information technology shares on rising expectations of a Federal Reserve rate cut in December.

The Nifty 50 rose 0.19% to 26,118.05 and the BSE Sensex was up 0.15% at 85,360.3 as of 10:08 a.m. IST.

Twelve of the 16 major sectors logged gains, while the broader small-caps and mid-caps traded flat.

IT firms, which earn a significant share of their revenue from the US, rose 1.5% as odds of a US rate cut in December rose after New York Fed President John Williams said interest rates could fall “in the near term”.

Lower US rates support economic growth in the world’s largest economy, benefitting sectors such as IT, while making emerging markets such as India more attractive for foreign investors.

Other Asian markets added 0.8% on the day. With no major domestic macro announcements scheduled till the GDP data on Friday, “markets will remain sensitive to US inflation data, comments on rate trajectory, dollar index and foreign flows,” said Pravesh Gour, senior technical analyst at Swastika Investmart.

The sentiment continues to be positive as the benchmarks head towards record high levels, supported by lower inflation and a recovery in earnings, according to HSBC.

Meanwhile, the Indian rupee strengthened on the day, after hitting a fresh record low of 89.49 on Friday, with traders attributing the reversal to the central bank intervention.

Among individual stocks, Tech Mahindra gained 3% as brokerages reiterated confidence in an earnings turnaround in fiscal 2027. Shaily Engineering Plastics jumped 2.6% after UBS initiated coverage with a “buy”, citing multiple growth levers and scope for positive earnings surprise.

Shyam Metalics added 2.7% after Jefferies started coverage with “buy”, citing robust growth potential. Hindustan Aeronautics fell 3.2% after its Tejas fighter jet crashed during an aerial display at the Dubai Airshow on Friday.