By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares rose on Friday, led by metals, 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 across global markets.
The Nifty 50 index climbed 0.65% to 25,580 points, while the S&P BSE Sensex was 0.64% higher at 83,714.08, as of 10:08 a.m. IST.
The Sensex gained about 0.7% earlier in the session to hit record high levels, while the Nifty was just shy of all-time high levels hit on Thursday.
The 50-basis-point 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 of cooling inflation without triggering an economic 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.
All the 13 major sectors advanced in early trade. Metals climbed 1.5%, with all 15 constituents logging gains.
Demand prospects for metals improved after the Fed rate cut and on expectations of stimulus from top consumer China. [MET/L]
JSW Steel jumped 3.5% 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.
The broader, more domestically focussed small- and mid-caps rose 0.5% each.
Among individual stocks, non-bank lender IIFL Finance jumped 11% after the Reserve Bank of India lifted curbs on its gold loan business.
Mankind Pharma gained 4.2% 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 and Eileen Soreng)
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