By Bharath Rajeswaran and Vivek Kumar M
(Reuters) – India’s shares rose on Wednesday in a broad-based rally, fuelled by hopes of progress in trade talks with Washington, while firming expectations of a U.S. rate cut also lifted information technology stocks.
The Nifty 50 rose 0.49% to 24,991.25 and the BSE Sensex gained 0.5% to 81,506.04 as of 09:37 a.m. IST. While the Nifty is set for a sixth straight session of gains, the Sensex is on a three-day winning run.
Fifteen of the 16 major sectors logged gains. The broader small-caps and mid-caps added 0.9% and 0.8%, respectively.
On Tuesday, U.S. President Donald Trump said his administration is continuing negotiations to address trade barriers with India and that he would talk to Prime Minister Narendra Modi, raising hopes of a deal after weeks of discord.
Modi, too, said he was looking forward to speaking with Trump, and that the two countries were working to conclude the negotiations at the earliest.
“A major positive for the market today comes from President Trump’s initiative to improve India-U.S. relations and PM Modi’s positive response to the same,” said VK Vijayakumar, chief investment strategist at Geojit Investments.
However, Trump also urged European Union (EU) officials to impose 100% tariffs on China and India as part of a strategy to pressure Russia, according to a U.S. official and an EU diplomat.
IT companies, which earn a significant chunk of their revenue from the U.S., gained about 2%, after climbing 2.8% on Tuesday.
Meanwhile, weakness in the U.S. labour market has reinforced bets for a 25-basis-point rate cut at the Federal Reserve’s meeting next week, two analysts said.
Among individual stocks, textile companies such as Welspun Living, Vardhman Textiles, Trident, KPR Mills, Arvind and Alok Industries climbed between 2% and 9% on U.S.-India trade deal hopes.
Seafood exporters Apex Frozen and Avanti Feed jumped 14% and 9.3%, respectively, after the EU cleared 102 additional Indian fishery establishments for exports to member countries.
(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Sumana Nandy and Janane Venkatraman)
