CHENNAI: India’s stock markets continued their rally on Tuesday, supported by positive global cues and expectations of a US interest rate cut. The Nifty 50 index rose by 0.25 percent to 24,835, while the BSE Sensex gained 163 points to 80,951 as of mid-morning. All major sectors recorded gains, with mid-cap and small-cap stocks rising by 0.2 percent and 0.3 percent, respectively
The information technology sector led the rally, rising 1.4 percent, with Infosys shares surging 3.4 percent following its announcement of a planned share buyback. Investor optimism was bolstered by weaker-than-expected US job data for August, which increased the likelihood of an interest rate cut by the US Federal Reserve. This further supported flows into emerging markets like India.
Rupee
The Indian rupee strengthened against the US dollar, trading between 87.96 and 88.00 per dollar in the morning session, recovering from a recent record low of 88.36. The improved tone in the rupee came after US labor market data showed slower job growth and rising unemployment, reinforcing market expectations of an imminent Fed rate cut. As a result, the rupee tracked gains seen in other Asian currencies.
Commodities
In the commodities market, gold prices continued to climb, reaching record levels. The price of 24K gold per 10 grams surpassed Rs 71,500, driven by global economic uncertainty and falling US Treasury yields, which increased gold’s appeal as a safe-haven investment. On the other hand, Brent crude oil prices declined to $66.4 per barrel. The drop was linked to weaker US job data, which reduced concerns of inflation and diminished expectations of further aggressive rate hikes. Lower crude prices are expected to ease pressure on petrol and diesel prices in India.