Indian Stocks Reach Record Highs, Trim Gains on Fed Chair's Rate Cut Assurance

Indian Stocks Reach Record Highs, Trim Gains on Fed Chair's Rate Cut Assurance

BENGALURU - Indian stocks initially rose to fresh record highs on Thursday but later trimmed gains due to pressure from Mahindra & Mahindra shares. Meanwhile, other Asian markets rallied following comments from the U.S. Federal Reserve Chair about potential rate cuts.

The NSE Nifty 50 and BSE Sensex opened at new peaks, with the Nifty up 0.07% and the Sensex up 0.04% in early trading. Both indexes had opened about 0.2% higher, marking consecutive record highs for the second day. So far this week, they have gained around 0.5%, setting them on course for their fourth consecutive week of increases, the longest streak in 2024.

ICICI Securities expressed optimism about the Indian market, noting the shallow retracement and prolonged rallies as signs of underlying strength.

Among sectors, the auto index was the top loser, down 0.4%, mainly due to a 4% decline in Mahindra & Mahindra shares. The company announced plans for a stake sale by one of its major shareholders, which led to heavy trading in its shares.

On the other hand, the metals sector surged 1.7%, with JP Morgan initiating coverage with a favorable outlook for steelmakers like JSW Steel, Tata Steel, and Hindalco Industries. These stocks gained between 1.2% and 3.5%.

Small and mid-cap stocks outperformed the benchmarks, with gains of 0.7% and 0.4%, respectively, indicating a more domestic focus.

Meanwhile, Asian markets rallied after Fed Chair Powell's congressional testimony hinted at potential interest rate cuts in 2024 and reassured about the U.S. economy's prospects for a soft landing.

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