Sensex, Nifty advance on hopes of Fed rate pause, China stimulus

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Indian shares rose on Monday, led by metals on fresh stimulus support by China for its property sector and information technology (IT) stocks on rising expectations that the US Federal Reserve will pause its monetary tightening cycle.

The Nifty 50 index rose 0.48 per cent to 19,528.80, while the S&P BSE Sensex settled 0.37 per cent higher at 65,628.14.

Twelve of the 13 major sectoral indexes logged gains. The metal index rose 2.28 per cent and hit a record high on further policy measures by China to support its property sector.

China is the top producer and consumer of metals.

Tata Steel and Hindalco added 3.70 per cent and 2.83 per cent, respectively, and were among the top Nifty 50 gainers.

IT stocks jumped 2.06 per cent after data showed a rise in unemployment in the US, bolstering bets of a rate pause by the Fed later this month. IT companies earn a significant share of their revenue from the US.

“IT valuations are very attractive and for a long-term investor, the sector is an absolute basket buy, despite the near-term growth concerns in the US,” Siddharth Bhamre, research head at Religare Broking, said.

The more domestically-focussed small-caps and mid-caps advanced 1.33 per cent and 0.98 per cent, respectively, and hit new all-time highs, continuing to outperform the blue-chips.

The small- and mid-caps have gained 28.97 per cent and 26.41 per cent, respectively, so far this year, more than thrice as much as the 7.86 per cent rise in the Nifty 50 index, on persistent retail inflows.

“Reasonable returns and expectations of sustained momentum in small- and mid-caps have driven investor interest in the space,” said Sandeep Bagla, CEO of Trust Mutual Fund.

Among individual stocks, Coal India climbed 4.60 per cent after production in August rose 13.2 per cent year-on-year.

Nazara Technologies jumped 9.91 per cent on the approval of preference shares to Kamatha Associates and NKSquared.

GMR Power and Urban Infra surged 19.86 per cent after its unit bagged a smart metering contract in Uttar Pradesh.