INDIA STOCKS-India stocks rise for 3rd week as Fed rate cut, US trade talks lift sentiment

By Bharath Rajeswaran and Vivek Kumar M

Sept 19 (Reuters) - India's equity benchmarks fell on Friday as financials and IT stocks came under profit-booking, but still marked a third straight week of gains after a U.S. rate cut, local tax reductions and optimism over trade talks with Washington.

The Nifty 50 .NSEI eased 0.38% to 25,327.05 and the BSE Sensex .BSESN lost 0.47% to 82,626.23 on Friday.

The two indexes added 0.9% each for the week.

Fourteen of the 16 major sectors rose for the week. The broader small-caps .NIFSMCP100 and midcaps .NIFMDCP100 gained 2.9% and 1.5%, respectively.

"We have seen a good rally in the past few sessions driven by multiple factors, indicating a marked shift in market sentiment ... the overall undertone remains bullish," said Aamar Deo Singh, senior vice president at Angel One.

The U.S. Federal Reserve cut interest rates by 25 basis points on Wednesday in a widely-anticipated decision.

Lower U.S. interest rates make emerging markets like India attractive to foreign portfolio investors, as Treasury yields and the dollar typically decline in such a scenario.

Investors also drew support from progress in India-U.S. trade talks as officials resumed negotiations this week.

On the day, financials .NIFTYFIN fell 0.6%, ending a record 12-session winning streak, while IT .NIFTYIT slipped 0.5% after three days of gains.

Adani group companies jumped between 0.3%-12.4% after the Securities and Exchange Board of India dismissed two charges leveled against billionaire Gautam Adani and his companies by U.S.- based Hindenburg Research.

However, the market regulator is still looking into more than a dozen allegations that Adani Group and its offshore funds broke securities regulations, Reuters reported on Friday.

Among stocks, Vodafone Idea VODA.NS surged 7.1% on reports that government told apex court it is not opposed to the telecom operator's plea on "adjusted gross revenue" dues.