20 august 2024 : BENGALURU – Indian stock markets followed the upward trend of their Asian counterparts on Tuesday, primarily driven by gains in the information technology sector, amid expectations that the U.S. Federal Reserve may initiate interest rate cuts starting in September.
As of 10:10 a.m. IST, the NSE Nifty 50 index had increased by 0.53% to reach 24,702.65, while the S&P BSE Sensex rose by 0.51% to 80,839.08.
Out of the 13 major sectors, ten recorded positive performance. IT firms, which derive a substantial portion of their revenue from the United States, experienced a 1.2% increase, making them the leading sectoral performers.
Analysts noted that the anticipation of a significant rate reduction in the U.S. and data suggesting that the U.S. economy is likely to avert a recession are enhancing interest in IT stocks.
They also indicated that Fed Chair Jerome Powell’s upcoming speech on Wednesday could further elevate IT stock prices.
Other Asian markets experienced gains as well, with the MSCI ex-Japan index rising by 0.25%.
In India, the broader small- and mid-cap indices, which are more focused on domestic markets, each saw an increase of approximately 0.2%.
Sonam Srivastava, founder and fund manager at Wright Research, remarked that although the benchmarks have undergone some time correction in August, the medium to long-term outlook for Indian equities remains optimistic.
She emphasized that the current market phase presents an opportunity for investors to rebalance their portfolios and identify potential entry points.
IndusInd Bank, a private lender, saw its shares rise by about 2% following the central bank’s approval to establish a wholly-owned asset management division, making it the top gainer in the Nifty 50 index.
The bank also led gains in the banking and financial sectors, which each increased by approximately 0.75%.
Polycab India experienced a rise of about 4% after UBS commenced coverage with a “buy” recommendation, citing the company’s advantage from long-term electrification trends.
SeQuent Scientific’s shares surged by 7% after receiving pre-qualification approval from the World Health Organization for a medication aimed at treating parasitic infections, including tapeworm and roundworm.
Nucleus Software’s stock skyrocketed by 18% in anticipation of a share buyback plan to be considered on Thursday.
