Fed fuels longest weekly winning streak in Indian shares in six years


© Reuters. Gardeners work outside the National Stock Exchange (NSE) building in Mumbai, India, August 16, 2018. REUTERS/Francis Mascarenhas/Files

By Bharath Rajeswaran

BENGALURU (Reuters) -India’s benchmark Nifty 50 and Sensex indexes rose to new all-time highs on Friday, potentially setting the stage for their longest joint weekly winning streak in nearly six years, as global rally extended on elevated bets of a U.S. rate cut by March 2024.

The NSE Nifty 50 index rose 0.58% to 21,306.05 points, while the S&P added 0.54% to 70,898.30, as of 10:04 a.m. IST.

High weightage information technology (IT) index gained about 2% and was among the top sectoral gainers.

IT companies, which earn a significant share of their revenue from the U.S., jumped 4.5% this week, marking their best performance in a month.

The rise comes after Fed Chair Jerome Powell acknowledged the risks of lowering rates too late, on Wednesday, which bolstered expectations of a 25 basis point (bp) rate cut by March 2024 and fuelled a rally across global stock markets.

Metal index gained 1.8%, aided by a jump in global metal prices as U.S. dollar came under pressure following Fed’s dovish commentary on future rate trajectory.

A weak U.S. dollar makes metals cheaper to holders of other currencies.[MET/l]

India’s Nifty 50 and Sensex have gained about 1.5% each this week, set for their longest joint weekly winning streak since January 2018.

The Nifty is set for its seventh consecutive weekly gain, adding 11.8% over the period, including Friday’s rise, on strong domestic macroeconomic data, return of foreign inflows, drop in oil prices and a favourable global interest rate outlook

The benchmark has been in the overbought territory for 13 sessions, hitting record highs in 10 of them.

“The near-term market trend remains positive,” said Nagaraj Shetti, senior technical research analyst at HDFC Securities.

There is a possibility of Nifty reaching the important resistance level of 21,550, Shetti added.

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