India’s Nifty 50 index crosses 25,000 points for the first time, driven by a global rally and speculation of U.S. interest rate cuts. Major gains seen in metals, automotive, and oil sectors.
Mumbai, India, Bollywood Fever: India’s benchmark stock index, the Nifty 50, breached the 25,000-point mark for the first time ever on Thursday, tracking a global rally after U.S. Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September. The NSE Nifty 50 rose 0.37% to 25,042.95 as of 9:50 a.m. IST, while the S&P BSE Sensex added 0.31% to 81,999.68.
The broader, more domestically focused small-and mid-caps also rose about 0.3% each.
Asian markets joined the overnight rally on Wall Street after the Fed held interest rates steady as expected, with Powell speaking of a “growing sense of confidence” that rate cuts could start in September. “A September rate cut in the U.S. will bring more investments into emerging markets, with Indian markets standing to benefit substantially,” said Deepak Jasani, head of retail research at HDFC Securities.
Eleven of the 13 major sub-indexes logged gains. Metals rose 1.75% on a softer U.S. dollar, which makes commodities cheaper for holders of other currencies, with expectations of further stimulus from top consumer China also aiding the rally.
Maruti Suzuki jumped 3.2% after beating June-quarter profit estimates, helped by higher sports utility vehicle sales. Tata Steel rose 2% after posting a rise in quarterly profit, while Coal India gained 3% after it beat quarterly profit estimates. Maruti, Coal India, and Tata Steel were among the top five Nifty 50 gainers.
Oil upstream companies ONGC and Oil India gained 1.5% and 3.5%, respectively, after the government cut the windfall tax on petroleum crude to 4,600 rupees ($55) from 7,000 rupees per metric ton. Upstream oil companies benefit from a cut in windfall tax as it reduces the tax on their crude oil output.
Bucking the trend, Infosys, India’s No.2 IT company, fell 0.5% after receiving a $4 billion tax bill related to services in some of its overseas branches.
The surge in the Nifty 50 index reflects optimism in the Indian market, buoyed by positive global cues and supportive domestic policies. Investors will be closely watching the developments in the U.S. monetary policy and their potential impact on emerging markets like India.
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