By Bharath Rajeswaran
BENGALURU (Reuters) -Information technology stocks lifted Indian benchmark indexes on Friday as an improvement in economic growth in the U.S., a key market for the sector, boosted sentiment.
The NSE Nifty 50 rose 0.7% to 24,578.13 as of 10:20 a.m. IST, while the S&P BSE Sensex added 0.6% to 80,526.42.
Ten of the 13 major sectors advanced.
Information technology stocks rose 2%, after data on Thursday showed that the U.S. economy grew faster than expected in the second quarter.
IT companies earn a major share of their revenue from the U.S. and data showing improvement in the U.S. economic growth augurs well for the sector.
The benchmarks had logged losses for the last five sessions, weighed by weaker-than-expected results from Reliance Industries, Wipro, Bajaj Finance, Axis Bank and Nestle.
The union budget on Tuesday, in which tax hikes on capital gains in equity investments and derivatives trading were announced, continued to be a dampener, analysts said.
The initial adverse response of the equity markets to the budget was “always going to be temporary” as investors would consider the broad policy continuity as a positive, said Ajit Banerjee, chief investment officer at Shriram Life Insurance.
“There wasn’t any surprise in revised borrowing numbers or fiscal deficit target, which is favourable for markets,” Banerjee added.
Metal index gained 2.1% and was the top sectoral gainer by percentage. Thirteen of the 15 constituents rose.
It had shed 1.3% in the previous session, amid drop in global metal prices on demand concerns in top consumer China.
Vedanta, which received an upgrade from S&P on improving capital structure and liquidity, rose 3%.
Cyient shed 8% after posting a drop in June-quarter profit on delays in project execution.
($1 = 83.7330 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee)
