By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares rose to record highs on Friday, as an outsized interest rate reduction by the U.S. Federal Reserve and the anticipation of a soft landing for the world’s largest economy boosted risk appetite.
The NSE Nifty 50 and S&P BSE Sensex rose about 1.1% each as of 11:10 a.m. IST, with the Sensex crossing 84,000 points for the first time ever.
The 50-basis-points U.S. rate cut on Wednesday and data showing smaller-than-expected weekly jobless claims on Thursday sparked optimism that the U.S. economy could achieve a soft landing – a scenario where inflation cools without triggering a recession.
“The Fed rate easing and positive economic data can positively affect Indian markets, boosting capital inflows and enhancing equities performance due to surplus liquidity,” said Anil Rego, founder and fund manager at Right Horizons Portfolio Management Services.
Twelve of the 13 major sectors logged gains. Metals led sectoral gainers with a 1.75% climb, and all 15 of its constituents in the green.
Demand prospects for metals improved on the back of the Fed rate cut and expectations of stimulus from top consumer China. [MET/L]
JSW Steel jumped 4% after Macquarie upgraded the stock to “outperform” from “buy”.
The brokerage also raised target prices on Jindal Steel and Power, Tata Steel, Hindalco and Coal India.
Macquarie, which now has an “outperform” rating on all five metal stocks in its portfolio, said the global rate easing cycle will be disinflationary and support commodity markets into 2025, while aiding steelmakers’ earnings.
Auto index gained 1.4% while financials rose 1%.
The broader, more domestically focussed small- and mid-caps rose 0.8% each.
Among individual stocks, non-bank lender IIFL Finance jumped 13% after the Reserve Bank of India lifted curbs on its gold loan business.
Mankind Pharma gained 7% to a record high after Investec initiated coverage of the stock with a “buy” rating, forecasting an upside of 37.7% in 12 months.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips, Eileen Soreng and Varun H K)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.