Fed rate cut lifts Indian shares to record high
Updates at 10:06 a.m. IST
By Bharath Rajeswaran
BENGALURU, Sept 19 (Reuters) -Indian shares climbed to a record high on Thursday, led by information technology stocks after the U.S. Federal Reserve kicked off its monetary easing cycle with a large half percentage point rate reduction.
The Nifty 50 index .NSEI gained 0.62% at 25,533.6 points, while the S&P BSE Sensex .BSESN added 0.68% at 83,515.55, as of 10:06 a.m. IST.
"While a rate cut was expected, a 50 basis point cut is a positive surprise and will boost the domestic equity markets," said Raghvendra Nath, managing director at Ladderup Wealth Management.
The Fed's dot plot also signalled that the central bank has projected another cut of half a percentage point in 2024.
The rate easing will shift foreign inflows into emerging markets such as India and also support earnings outlook for domestic IT companies, three analysts said.
IT companies .NIFTYIT, which earn a significant share of their revenue from the U.S., jumped 1% during the session.
Twelve of the 13 major sectors logged gains. The broader, more domestically focussed small- .NIFSMCP100 and mid-caps .NIFMDCP100 rose about 0.4% each.
Other Asian markets also advanced, with the MSCI Asia ex-Japan index .MIAPJ0000PUS rising 0.9%. MKTS/GLOB
Among individual stocks, state-owned power producer NTPC NTPC.NS rose 4% after its green energy arm filed for a $1.2 billion initial public offer. It was the top Nifty 50 gainer.
Bajaj Auto BAJA.NS added 2% after HSBC retained "buy" and hiked target price on the company, citing earnings resilience.
Non-bank lender Aditya Birla Capital ADTB.NS gained 3% after the Reserve Bank of India (RBI) gave its approval to merge its unit Aditya Birla Finance with itself.
Garden Reach Shipbuilders GRSE.NS leaped 3% on a $54 million order win.
FirstCry parent Brainbees Solutions BRAE.NS was up 3% after BofA Securities and Morgan Stanley initiated coverage with "buy", citing strong earnings outlook.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Mrigank Dhaniwala and Sumana Nandy
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