By Vivek Kumar M
(Reuters) -Indian equities rose in early trade on Wednesday, tracking gains across Asian markets as strengthening bets for a U.S. Federal Reserve rate cut later this month buoyed sentiments.
The Nifty 50 added 0.28% to 25,216.2, while the BSE Sensex rose 0.20% to 82,192.33 as of 9:52 a.m. IST.
Fifteen of the 16 major sectors were trading higher. The broader mid-caps and small-caps gained 0.7% and 0.3%, respectively.
On Tuesday, Fed Chair Jerome Powell noted that the U.S. labour market remained weak, while the economy appeared to be on a firmer footing, adding that the inflation outlook remains unchanged from September, when the central bank cut rates by 25 basis points.
“Fed Chair Powell reinforcing expectations of an October rate cut and hinting to pause balance sheet run-off are good news for the bulls,” said Prashanth Tapse, senior vice president (research) at Mehta Equities.
Asian markets advanced 1.3% on optimism around a Fed rate cut. However, renewed U.S.-China trade tensions kept a lid on risk appetite. [MKTS/GLOB]
Lower U.S. interest rates make emerging markets like India attractive to foreign investors as dollar and Treasury yields are typically lower.
Information technology companies, which earn a substantial chunk of revenue from the U.S., climbed, led by a 6.7% rise in Persistent Systems on reporting higher revenue and profit for the September quarter.
“IT earnings have started on a good note. Most companies have either reported in-line numbers or topped expectations. There has not been any disappointment and that is giving some comfort to investors,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
Among individual stocks, ICICI Lombard General Insurance jumped 7% after reporting higher profit for the September quarter.
(Reporting by Vivek Kumar M; Editing by Sumana Nandy)
