Indian shares continue to scale new peaks after US rate cut

BENGALURU, Sept 23 (Reuters): Indian shares hit record highs for the third straight session on Monday as the outsized US rate cut last week boosted investors' risk appetite.
The Nifty 50 index rose 0.57 per cent to 25,939.05, while the S&P BSE Sensex gained 0.45 per cent to 84,928.61, notching record closing highs. They also hit all-time highs in the session.
The broader, more domestically focussed small- and mid-caps rose 1.1 per cent and 0.8 per cent, respectively.
The rally has pushed the benchmark indexes into "overbought" territory, with the relative strength index above 70, according to LSEG data.
But that has not deterred investors.
"India remains the best long-term opportunity for equity investors globally," Christopher Wood, global head of equity strategy at Jefferies, said in a note.
Even if there is a "meaningful" correction at these elevated valuations, it is only likely to result in increased foreign buying, Wood said.
After the US rate cut on Wednesday, foreign institutional investors bought Indian shares worth 115.16 billion rupees ($1.4 billion) over Thursday and Friday.
On the day, twelve of the 13 major sectors advanced, led by a 3.4 per cent jump in public sector banks. Oil stocks jumped 1.9 per cent, led by ONGC.
ONGC advanced 3.2 per cent after the company's overseas unit and eight oil producers signed a deal to produce natural gas in Azerbaijan.
Mahindra & Mahindra gained 3.4 per cent to a record high after Goldman Sachs hiked its price target on the automaker's stock, citing robust growth prospects.
ONGC and M&M were among the top three Nifty gainers.
Drug maker Glenmark Pharma climbed 4.3 per cent after the US drug regulator classified one of the company's facilities as satisfactory after a routine probe.
City gas distributor Adani Total Gas gained 5.9 per cent after securing financing worth $375 million to expand its network.