Indian shares close at record high on IT stocks boost
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By Hritam Mukherjee
BENGALURU, July 1 (Reuters) -Indian shares closed at a record high onMonday, driven by gains in information technology stocks on renewed hopes of an interest rate cut by the U.S. Federal Reserve in September.
The NSE Nifty 50 .NSEI settled 0.55% higher to 24141.95 points, while the S&P BSE Sensex .BSESN added 0.56% to 79476.19 points as of 3:30 P.M. IST.
Ten out of the thirteen major sub-sectoral indexes ended higheron the day, with heavyweight IT stocks .NIFTYIT adding about 2%. The gauge was among the top percentage gainers on the day.
"IT stocks are getting a boost from bolstered September rate cut bets after the latest U.S. data signalled resilience in their economy," said Abhishek Goenka, founder and CEO at IFA Global.
A slightly-cooler U.S inflation data on Friday drovehopes of a September rate cut by the U.S. Federal Reserve to 68% from 61% before the data, as per LSEG FedWatch data.
Indian IT companies are sensitive to Fed rate cuts as they earn the bulk of their revenue from their U.S. clients, who have been cutting spending due to higher interest rates.
Tata Consultancy Services TCS.NS, Wipro WIPR.NS and Tech Mahindra TEML.NS were among the top gainers on the benchmark, gaining 1.9%-2.9%.
Higher Fed rates also makes stock market investments in emerging markets like India unattractive for foreign investors as elevated U.S. bond yields offer safety over riskier assets.
Meanwhile, autostocks .NIFTYAUTO added 0.5%,after some firms' June monthly sales datashowed growth in sports utility vehicles (SUVs). Heaviest stock on the gauge, Mahindra and Mahindra MAHM.NS, ended 0.3% up after its monthly total volumes grew 11% year-on-year.
Meanwhile, small- .NIFSMCP100 and mid-caps .NIFMDCP100 added 1.5% and 1%, respectively, to record highs.
Among individual stocks, GRP GRPI.NS jumped 18.8%after its board approved the issue of bonus shares in a 3:1 ratio, while Garden Reach Shipbuilders GRSE.NS climbed 9.9%on a $21 million order win.
Reporting by Hritam Mukherjee and Sethuraman NR in Bengaluru; Editing by Janane Venkatraman and Nivedita Bhattacharjee
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