India's BSE Sensex experienced a modest rise of approximately 0.2%, closing at 85,265 on Thursday, effectively ending a four-day losing streak. This upturn was primarily driven by gains in the IT sector with significant exposure to the US market, as renewed optimism surfaced regarding potential interest rate cuts by the Federal Reserve. Such cuts could potentially enhance economic growth in the US, thereby benefiting tech companies that derive substantial revenue from the region. Notable performers included TCS, which rose by 1.5%, Bharat Electronics and Tech Mahindra, both up by 1.3%, along with Infosys and HCL Tech, each seeing a 0.9% increase.
Despite these gains, overall market sentiment remained cautious due to factors such as anticipation of the Reserve Bank of India's (RBI) policy decision on Friday, a weakening rupee, ongoing foreign capital outflows, and uncertainties surrounding a potential US-India trade agreement. The divergence between GDP growth and inflation has recently cast doubt on the necessity for a rate cut, though a 25-basis point reduction is still expected by some analysts. Conversely, Reliance Industries dropped 0.9%, Maruti Suzuki declined by 0.7%, Kotak Mahindra Bank fell by 0.5%, and both Titan and Eternal saw decreases of 0.4%.
