India shares rise, led by IT on Infosys buyback proposal
By Vivek Kumar M
India's equity benchmarks rose in early trade on Tuesday, led by information technology stocks after Infosys announced it will consider a share buyback, with expectations of a U.S. interest rate cut and the positive sentiment from tax cuts also helping.
The Nifty 50 NSE:NIFTY was up 0.2% at 24,823.1 points and the BSE Sensex BSE:SENSEX rose 0.24% to 80,980.81, as of 10:27 a.m. IST.
Seven of the 16 major sectors rose, with the broader mid-caps NSE:CNXMIDCAP and small-caps NSE:CNXSMALLCAP trading little changed.
"The positive news flows around GST cuts and the U.S. interest rate cut is providing a floor to the market, protecting it from a downside. It was much needed in the context of uncertainty stemming from U.S. tariffs," said Dharmesh Kant, head of equity research at Cholamandalam Securities.
IT NSE:CNXIT jumped 2.3%, led by a more than 4% surge in Infosys NSE:INFY1! after it announced plans to consider a share buyback on September 11.
The sector accounted for more than 85% of the Nifty's gains on the day - the top three gainers on the index were IT firms.
U.S. rate cut prospects and rupee depreciation is also providing tailwinds to the IT sector, as per analysts.
Lower interest rates in the U.S. bodes well for IT firms as it can revive technology spending in the world's largest economy, a key market for the sector. Lower rates also make emerging markets such as India more attractive for investors.
Bets for a U.S. Federal Reserve rate cut at its September 16-17 policy meeting rose after data showed fewer-than-expected job additions in in August.
Auto stocks NSE:CNXAUTO eased 0.3%, following a 3.3% jump in the previous session on prospects of demand revival after tax cuts.
RailTel Corporation of India NSE:RAILTEL rose 5.7% on receipt of multiple orders on Monday.
Meanwhile, the Securities Appellate Tribunal is set to begin hearing for U.S.-based Jane Street’s case against India’s market regulator in an alleged market manipulation case.
