BENGALURU, Sept 20 (Askume) – Indian shares hit a record high on Friday amid concerns about a sharp interest rate cut by the Federal Reserve and a bleak outlook for the world’s largest economy.
As of 11:10 am, the NSE Nifty 50 (.NSEI) and the S&P BSE Sensex (.BSESN) were both up around 1.1%, breaching the 84,000-point mark for the first time.
US interest rates were cut by 50 basis points on Wednesday and data on Thursday showed weekly jobless claims rose less than expected, raising hopes that the US economy may be entering soft mode, where inflation does not accelerate into a recession.
Anil Rego, founder and fund manager, Right Horizons Portfolio Management Services, said: “Fed’s interest rate easing and positive economic data are likely to have a positive impact on the Indian market, leading to higher capital inflows and improved equity performance due to liquidity”.
Twelve of the 13 core industries recorded growth. Metals (.NIFTYMET) led the sector with a gain of 1.75%, with all 15 components in the green.
Demand for metals has improved on interest rate cuts by the Federal Reserve and expectations of stimulus from China, the biggest consumer.
JSW Steel (JSTL.NS) rose 4% after Macquarie upgraded the stock to “outperform” from “buy” .
The brokerage also raised price targets on Jindal Steel & Power (JNSP.NS) , Tata Steel (TISC.NS) , Hindalco (HALC.NS) and Coal India (COAL.NS) .
Macquarie, which currently has an “outperform” rating on all five metals stocks in its portfolio, said the global rate cutting cycle would lead to deflation and support commodity markets until 2025, while helping profits for steelmakers.
The auto index (.NIFTYAUTO) rose 1.4%, while the financial index (.NIFTYFIN) gained 1%.
The broader, more domestically focused small-cap (.NIFSMCP100) and mid-cap (.NIFMDCP100) sectors gained 0.8%.
Among stocks, non-bank lender IIFL Finance (IIFL.NS) surged 13% after the Reserve Bank of India lifted restrictions on its gold loan business.
Mankind Pharma (MNKI.NS) rose 7% to a record high after Investec gave the stock a “buy” rating and forecast 12-month upside of 37.7%.
