Indian benchmark indices surged to a record high for the second straight session on Friday, driven by larger-than-expected interest rate cuts by the U.S. Federal Reserve and better-than-expected U.S. jobless claims data, boosting investor confidence in the possibility of a soft landing for the U.S. economy.
The S&P BSE Sensex was up by 1,381.99 points or 1.63% to close at 84,566.79, while the NSE Nifty50 gained 380 points or 1.50% to settle at 25,795.80.
Both broad market indices and sectoral indices on NIFTY were in the green except PSU banking, which closed flat. Auto, Private Bank, Realty, Metals, and Financial Service shares outperformed the NIFTY 50 index, with shares of Mahindra & Mahindra (up 5.32%), ICICI Bank (up 4.47%), JSW Steel (up 3.69%), Larsen & Toubro (up 2.97%), and Coal India (up 2.84%) leading the march.
Top losers on Nifty included Grasim Industries, which lost 2.33%, State Bank of India, down 0.69%, and NTPC, which declined by 0.22%.
Market breadth was positive, with 1,852 shares advancing out of 2,844 shares traded, while 923 shares declined, and 69 remained unchanged as expected. The Mid-cap and Small-cap shares recovered from the deep fall in the last session. Investors are expecting foreign investment inflows into large-cap shares following the easing of interest rates by the Fed.
Elsewhere, the Asian markets closed broadly higher, with the Nikkei 225 closing up 619.00 points or 1.67% to 37,739.50. The index pared some of the initial gains after the Bank of Japan kept benchmark interest rates unchanged today. Hong Kong's Hang Seng Index rallied by 245.41 points, or 1.36%, to 18,258.57, and South Korea's Kospi closed up 0.49%.
Indian stock markets continue to follow global cues, and the better-than-expected rate cuts, combined with moderating inflation and the positive jobless claims data released overnight, have boosted investor sentiment and expectations of a soft landing for the U.S. economy.
The U.S. Initial Jobless Claims report showed that initial claims for state unemployment benefits dropped by 12,000 last week to 219,000 for the week ended September 14, against the forecast by analysts polled by Reuters, who expected claims to reach 230,000 for the period.
The U.S. stock market rallied overnight, with the Dow Jones and S&P 500 touching record highs in intraday trade.
