India's Nifty 50 rose for the twelfth consecutive session on Friday, its longest-ever rally, and pushed the market to a fresh peak on hopes of an imminent U.S. interest rate cut.
The benchmark NSE Nifty 50, launched in April 1996, rose 0.33% to 25,235.9, while the S&P BSE Sensex added 0.28% to 82,365.77. Both hit all-time highs.
They added 1.6% this week and about 1% over August, notching their third straight weekly and monthly gain.
Robust U.S. economic data through the month and dovish commentary from Federal Reserve officials, including Chair Jerome Powell, eased growth concerns and heightened hopes of a rate cut in September.
That is, per analysts, expected to boost foreign investments into emerging markets such as Indian equities. Foreign investors turned net buyers in the second half of the month, while domestic investors were buyers throughout.
"Liquidity is coming in left, right and centre, while the near-certainty that the U.S. rate cut will start from September is boosting buying interest and consequently the momentum in markets further," said Avinash Gorakshakar, head of research of Profitmart Securities.
"However, the benchmarks may not gallop from here given the high valuations but certainly, the sentiment in Indian markets is as bullish as ever."
The biggest effect of an imminent U.S. rate cut was on IT and pharma companies, which gained 4.74% and 6.61%, respectively, in August. Both sectors rely on the U.S. for a significant share of revenue.
The broader, more domestically focussed small- and mid-caps rose about 0.9% and 0.5%, respectively, for the month.
Key U.S. inflation data, later in the day, will help gauge the likelihood of a September rate cut. On the domestic front, data, also due after the bell, is expected to show India's economic growth slowed in the April-June quarter.
But, analysts said this was priced in since the period included the national elections.
