By Bharath Rajeswaran and Vivek Kumar M
(Reuters) -India’s equity benchmarks rose on Monday, led by gains in metals and IT stocks, as hopes of a U.S. rate cut outweighed concerns over potential U.S. tariffs on Indian goods.
The Nifty 50 rose 0.64% to 24,722.75 points and the BSE Sensex gained 0.52% to 81,018.72 on Monday, recovering from a two-day drop of about 1.1% after U.S. President Donald Trump announced 25% tariffs on India.
“We are seeing some recovery today after last week’s reaction to tariff news. But the market should be range bound with a negative bias going ahead until some equilibrium is reached on U.S. tariffs,” said UR Bhat, co-founder of tech-driven investment platform Alphaniti Fintech.
Fourteen of the 16 major sectors advanced on the day. The broader small-caps and mid-caps added 1.3% and 1.4%, respectively.
Metals gained 2.5%, and were the top sectoral gainers, as a softer dollar made commodities cheaper for overseas buyers. [MET/L]
Meanwhile, IT stocks, which get a significant chunk of revenue from the U.S., jumped 1.6% on hopes of a rate cut by the U.S. Federal Reserve after data showed weak labour market in the world’s largest economy.
The U.S. added fewer jobs than expected in July, with sharp downward revisions to previous months, lifting bets of a September rate cut to 80% from 63% a week earlier.
Asian shares rose 0.9% on growing hopes of lower U.S. interest rates, which tend to boost demand for emerging market equities like India among foreign investors.
Autos too advanced 1.6%, led by Hero MotoCorp and TVS Motor, following their strong July sales numbers.
Among other stocks, agro-chemicals manufacturer UPL soared 7% and was among top midcap gainers, as a growth in volumes and margin expansion in first quarter cheered investors.
Multi Commodity Exchange of India gained 5% after on strong quarterly earnings growth and announcement of a stock split.
(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy and Ronojoy Mazumdar)
