India’s blue-chip indexes advanced in a broad-based rally for a second straight week, as soft U.S. jobs data bolstered bets of a Federal Reserve rate cut next week.
The indexes gained 1.5% this week, also supported by New Delhi’s tax cuts on hundreds of goods as well as hopes of a revival of trade talks with the United States.
On Friday, the Nifty 50 gained 0.43% to 25,114, while the BSE Sensex rose 0.44% to 81,904.7.
This was Nifty 50’s eighth daily rise, its longest winning run in a year.
In the week, 15 of the 16 major sectors gained while broader smallcaps and midcaps . rose 1.9% and 2%, respectively.
IT companies which earn a large share of revenue from the U.S., gained 4.3% in their best week in about four months, aided in part by a share buyback plan by India’s second biggest IT company, Infosys .The Federal Reserve is expected to cut rates by 25 basis points at its September 16-17 meeting. Investors expect two more rate cuts later in the year.
Indian shares extend winning run as U.S. trade talks, rate cut hopes lift sentiment
Lower U.S. rates drag down Treasury yields and the dollar, pushing flows towards emerging markets such as India.
Signs of easing trade tensions between Washington and New Delhi after comments by U.S. President Trump about resuming talks with India also aided sentiment, said Gaurav Garg, research analyst at Lemonn Markets Desk.
Auto shares jumped 2.1% this week, with Tata Motors and Maruti Suzuki India rising 3.4% and 2.9%, respectively, boosted by tax cuts. Several automakers have passed on the tax benefits to customers.
“With consumption driving 55–60% of India’s GDP, tax cuts are a powerful catalyst,” said Rahul Singh, CIO of equities at Tata Asset Management.
“They fuel earnings, cushion trade risks, and keep markets’ confidence in the India growth story alive.”
Investors await India’s inflation data, due later in the day. Consumer prices likely rose 2.1% in August, up from July’s 1.55%, as per a Reuters poll.
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