Indian Stock Market Starts Strong on Fed Rate Cut Boost
Mumbai’s stock market kicked off the day on a positive note today, riding high on upbeat global signals after the US Federal Reserve slashed interest rates. This move has sparked optimism among investors, pushing the key Indian indices upward right from the opening bell.
At around 9:24 AM, the Sensex climbed 347 points, or 0.42%, to reach 83,041. Meanwhile, the Nifty surged 89 points, or 0.35%, settling at 25,419. These gains reflect a broader rally in the Indian stock market, fueled by the Fed’s decision to resume its rate-cutting cycle.
The Federal Reserve trimmed rates by 25 basis points, bringing the target range to 4.0-4.25%. Officials pointed to changing economic risks, like a softening job market and sticky inflation, as key reasons. They even forecast two more cuts this year, potentially dropping rates to 3.50-3.75% by the end of 2025. This Fed rate cut news has clearly lifted spirits in global markets, including India.
Midcap and smallcap stocks joined the party too. The Nifty Midcap 100 edged up 0.08%, while the Nifty Smallcap 100 leaped 0.68%. In the Nifty’s big players, Tech Mahindra led the charge with a 1.10% gain, followed by ICICI Bank, TCS, Bajaj Finserv, and Trent. On the flip side, Hindalco, Bajaj Finance, Apollo Hospitals, SBI, and SBI Life Insurance saw some dips.
Sector-wise, the Nifty IT index stole the show, jumping 1.5% amid tech stock market trends. Nifty Realty rose 0.66%, and Nifty Pharma gained 0.37%. Almost every sector traded green, except metals, which lagged behind.
Yesterday, the Nifty 50 comfortably stayed above 25,300, showing solid investor confidence at these levels. Experts now spot upside potential in the Indian stock market, with resistance likely around 25,400-25,500. Support holds strong at 25,000-24,900.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, shared his take: "With the labor market cooling and GDP growth for 2025 projected at just 1.6%, two more rate cuts look likely this year." He also highlighted how the ongoing market rally draws strength from hopes of better earnings and positive vibes from India-US trade talks.
Globally, Asia-Pacific markets mostly shone bright after US President Donald Trump noted smooth progress in US-China trade negotiations. China’s Shanghai index rose 0.41%, Shenzhen climbed 1.09%, Japan’s Nikkei added 1.09%, and South Korea’s Kospi gained 1%. Hong Kong’s Hang Seng slipped slightly by 0.08%. In the US overnight, the Dow edged up 0.57%, but the S&P 500 fell 0.10% and Nasdaq dropped 0.33%.
On the investor front, foreign institutional investors (FIIs) sold equities worth Rs 1,124 crore on Wednesday, while domestic institutional investors (DIIs) scooped up Rs 2,293 crore. As the day unfolds, keep an eye on how these global cues shape the Indian stock market trends.
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