Indian shares hit record high, log weekly gains on US rate cut euphoria

BENGALURU, Sept 21 (Reuters): Indian shares surged to record highs and registered weekly gains on Friday, as an outsized interest rate cut by the US Federal Reserve earlier in the week whetted investor risk appetite across global markets.
The NSE Nifty 50 added 1.48 per cent to 25,790.95 and the S&P BSE Sensex gained 1.63 per cent to 84,544.31, logging record closing highs.
The Sensex also rose above 84,000 for the first time on Friday.
For the week, the Nifty and Sensex gained 1.7 per cent and 2 per cent, respectively, posting a fifth week of gains in six.
The 50-basis-points Fed rate cut on Wednesday and data showing smaller-than-expected weekly jobless claims on Thursday sparked hopes of the US economy achieving a soft landing - a scenario where inflation cools without triggering a recession.
The Fed rate cut has improved global sentiment and could trigger a rally in markets because emerging markets like India will become more attractive due to the possibility of higher returns and foreign inflows will also rise, said Divam Sharma, founder and fund manger at Green Portfolio PMS.
Twelve of the 13 major sectors logged gains, on the day. The metals index jumped 1.7 per cent, with 12 of its 15 constituents rising.
Demand prospects for metals improved on the back of the Fed rate cut and expectations of stimulus from top consumer China.
JSW Steel leaped 3.5 per cent after Macquarie upgraded stock to "outperform" from "buy", saying that it sees the global rate easing cycle benefiting domestic steel makers.
The auto index gained 1.9 per cent and financials rose 1.6 per cent, powering the market rally.
The broader, more domestically focussed small- and mid-caps rose 1 per cent and 1.5 per cent, respectively.
Among individual stocks, non-bank lender IIFL Finance jumped 7 per cent after the Reserve Bank of India lifted curbs on its gold loan business.
Mankind Pharma soared 4.5 per cent to a record high after Investec initiated coverage with "buy", forecasting an upside of 37.7 per cent in 12 months.