BENGALURU - Indian shares recouped early losses to trade higher on Thursday as gains in financial stocks, following Fed's rate-cut hints, offset losses in IT counters triggered by a report of U.S. move to cap H1-B work visas.
The U.S. Fed said it was gearing up to face global growth and economic risks with rate cuts starting as early a next month. Its comments sent global stocks higher, with the MSCI's broadest index of Asia-Pacific shares outside Japan rising 0.6%.
The broader NSE Nifty was up 0.22% at 11,716.85 as of 0442 GMT, while the benchmark BSE Sensex rose 0.27 % at 39,217.01.
Most domestic sectors were trading higher, led by Nifty public sector banking and Nifty pharma sectors, which were up 1.23% and 0.83%, respectively.
"Rate cuts are always good for the market. Inflation is low and if we need to have a balanced economy, interest rates must match the inflation," said Madhumita Ghosh, Associate Dean at Tasmac Global Solutions.
Meanwhile, the United States told India that it was planning caps on visas to countries that force foreign companies to store data locally, three sources with knowledge of the matter told Reuters.
The news sent the Nifty IT index down 1.5% as sector heavyweights, Infosys and Tata Consultancy Services, fell between 1.5% and 2%.
Among the gainers, Yes Bank and Indiabulls Housing Finance reversed their losses to move to the top of the NSE list, gaining over 3.2% and 4%, respectively.
Other blue-chip gainers for the day included oil marketing companies such as Indian Oil Corp and Bharat Petroleum Corp, which rose over 1% each.
Apollo Hospitals Enterprise shares rose 1.5% after the company agreed to sell over 51% in Apollo Munich Health Insurance to India's biggest shadow bank HDFC for $193.4 million.
Jet Airways continued to nosedive, falling 12.08% ahead of its bankruptcy hearing scheduled later in the day.
Debt-ridden shadow bank IL&FS's arms, IL&FS Transportation Networks and IL&FS Engineering and Construction, dropped between 4% and 5 % after reports said India's economic law watchdog was investigating two of its directors.