IT, energy stocks lift Indian shares to new all-time highs

By Bharath Rajeswaran

BENGALURU (Reuters) -India’s benchmark indexes advanced to fresh record highs for the third consecutive session on Wednesday, led by energy stocks on moderating oil prices and information technology (IT) shares on growing bets of an interest rate cut in the U.S.

The NSE Nifty 50 index rose 0.40% to 20,937.70, while the S&P BSE Sensex settled 0.52% higher at 69,653.73, a record close for both the blue-chip indexes.

Both the indexes settled in the overbought zone, with the Nifty’s relative strength index hitting its highest since Sept. 16, 2021.

The energy index climbed 1.55% to a new record, aided by a drop in crude oil prices to a five-month low amid doubts over OPEC+ supply cuts and China’s demand recovery.[O/R]

IT companies, which earn a significant share of their revenue from the U.S., gained 1.67% on the day, tracking a rise in Asian technology peers, after softer-than-expected labour market data raised rate cut expectations in the United States.

“The recent drop in crude oil prices alleviates concerns about inflation resurgence,” said Jaykrishna Gandhi, head of business development – institutional equities, at Emkay Global Financial Services.

“Anticipation of a U.S. interest rate cut early next year can further fuel foreign inflows, reinforcing market momentum,” Gandhi added.

High-weightage financials fell 0.14% after rising in the last eight sessions.

Mid-caps rose 0.25%, while small-caps added 0.38%.

“There is gradual realisation that valuations are quite rich in small- and mid-caps, which could add to inflows into large-caps,” Dipan Mehta, director at Elixir Equities.

Reliance Industries, the second-heaviest stock in the Nifty 50 index, gained about 1% after Jefferies reiterated “buy” on the stock.

Auto stocks including Eicher Motors, Bajaj Auto, and Hero MotoCorp lost between 1% and 2.2%, after CLSA downgraded the two-wheeler stocks after a recent rally.

($1 = 83.3600 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil and Sonia Cheema)