By Vivek Kumar M
(Reuters) – India’s benchmark Nifty 50 closed higher for a fifth consecutive session on Tuesday, with gains led by information technology stocks on Infosys’ share buyback plan and U.S. interest rate cut prospects.
The Nifty 50 and the BSE Sensex gained 0.39% each to 24,868.6 and 81,101.32 points, respectively.
Nine of the 16 major sectors rose, with the broader mid-caps and small-caps rising 0.2% and 0.3%, respectively.
IT jumped 2.8%, led by a 5% surge in Infosys after it announced plans to consider a share buyback on September 11.
The sector accounted for about 79% of the Nifty’s gains on the day, with three of the top four gainers on the index being IT firms.
Rupee depreciation and rising bets of a U.S. rate cut also supported a rise in IT stocks, analysts said.
“Major IT stocks are down 25%-30% from their lifetime high levels due to uncertainty over U.S. demand. The hopes of some improvement have led to bargain buying,” said Aamar Deo Singh, senior vice president at Angel One.
The day’s gains trimmed the IT index’s year-to-date losses to 18.7%. The Nifty is up 5.2% for the year.
Lower interest rates in the U.S. bode well for IT firms as it can revive technology spending in the world’s largest economy, a key market for the sector. Lower rates also make emerging markets such as India more attractive for investors.
Bets for a U.S. Federal Reserve rate cut at its September 16-17 policy meeting rose after data showed fewer-than-expected job additions in August.
The expectations of Fed easing lifted equities globally, with MSCI’s broadest index of Asia-Pacific shares outside Japan rising 1%.
Among individual stocks, RailTel Corporation of India rose 5.4% on receipt of multiple orders on Monday.
(Reporting by Vivek Kumar M; Editing by Sumana Nandy, Rashmi Aich and Janane Venkatraman)
