Stocks on the Nifty enjoyed their fifth consecutive session of gains, driven primarily by the IT sector, following news of Infosys buyback and optimistic expectations about the US interest rate cut.
The IT sector experienced a significant boost in India, with gains attributed to various positive economic indicators and expectations of a U.S. Federal Reserve rate cut.
On September 16, the Nifty 50 and the BSE Sensex closed higher for a fifth consecutive session, with the Nifty 50 closing at 24,868.6 points and the BSE Sensex closing at 81,101.32 points. The IT sector, in particular, rose by 2.8%, led by a 5% surge in Infosys.
Three of the top four gainers on the index were IT firms, contributing to the overall gains in the sector. The sector accounted for about 79% of the Nifty's gains on the day.
The U.S. interest rate cut prospects, if realised, could potentially revive technology spending in the world's largest economy, benefiting IT firms. Expectations of a U.S. Federal Reserve rate cut at its September 16-17 policy meeting have risen after data showed fewer-than-expected job additions in August.
Lower U.S. interest rates make emerging markets such as India more attractive for investors. This, coupled with the positive economic indicators, has led to the rise in IT stocks.
Rupee depreciation and rising bets of a U.S. rate cut also supported the rise in IT stocks. Additionally, the expectations of Fed easing led MSCI's broadest index of Asia-Pacific shares outside Japan to rise by 1%.
In other positive news, RailTel Corporation of India saw a 5.4% increase in its stock price due to multiple orders received on Monday.
Nine out of 16 major sectors rose during the session, with the broader mid-caps and small-caps also rising by 0.2% and 0.3%, respectively. The positive momentum in the IT sector is expected to continue, given the favourable economic conditions and the anticipated U.S. interest rate cut.
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