IT pushes Indian stocks to record high after Powell’s dovish stance
Delhi Delhi. Indian information technology stocks surged on Monday, pushing domestic equities close to record highs after the Federal Reserve chief hinted at cutting interest rates.The NSE Nifty 50 index rose 0.76 per cent to 25,010.6, while the S&P BSE Sensex closed 0.75 per cent higher at 81,698.11.The Nifty 50 touched the 25,000 mark for the second time during the session.With the session’s gains, the benchmarks turned positive for the month and are less than 0.5 per cent behind the all-time high hit on August 1.
Bendous inflation data in the US, low readings of jobless claims, dovish Fed minutes and Powell’s comments last week have helped boost global sentiment.The heavyweight IT index gained 1.39 per cent on the day. IT companies earn a large portion of their revenue from the United States.The metal index jumped 2.16 per cent and was the top gainer in the index, driven by expectations of interest rate cuts by the Fed and a softer US dollar.
14 of the 15 components of the metal index rose. Aluminium maker Hindalco Industries jumped 3.9 per cent and was the top gainer in the Nifty 50. On Friday, Powell said that “the time has come for policy accommodation”, signalling that the central bank is ready to begin its policy easing cycle. “Possible Fed interest rate cuts in September will boost foreign portfolio investments and improve overall market sentiment, so momentum in Indian equity markets is likely to remain positive,” said Nirav Karkera and Sagar Shinde, research analysts at wealth management platform Fisdom Research.
More domestically focused small and mid-sized stocks rose 0.3 per cent and 0.6 per cent, respectively. Paytm fell 4.4 per cent after a report said India’s market regulator has issued show-cause notices to founder Vijay Shekhar Sharma and board members who served during the company’s initial public offering in 2021. Drugmaker Zydus Lifesciences lost nearly 6 per cent as rival Teva Pharma received approval from the US drug regulator for a generic drug.
