Source Reuters
Mumbai: Indian equity markets staged a robust rebound on Thursday, snapping a three-day losing streak, as investors cheered the US Federal Reserve’s decision to cut interest rates. The market witnessed a broad-based rally, with benchmark indices recording healthy gains and strong buying across sectors.
The S&P BSE Sensex climbed 427 points, or 0.51%, to close at 84,818.13. The NSE Nifty 50 followed suit, gaining 141 points, or 0.55%, to settle near the 25,900 mark at 25,898.55.
Key Market Highlights
Fed Easing Lifts Sentiment: The US Federal Reserve’s widely anticipated 25-basis-point rate cut and the signal of another potential cut in the following year provided a significant boost to global market sentiment. This move, which led to a softening of the US dollar and a drop in US bond yields, typically makes emerging markets like India more attractive to foreign investors.
Broad-Based Gains: The rally was comprehensive, with the broader market indexes outperforming the benchmarks. The BSE Midcap Index rose by 0.79%, and the BSE Smallcap Index gained 0.51%, reflecting widespread investor confidence.
Sectoral Performance: Almost all major sectoral indices closed in the green. Rate-sensitive sectors and global trade-linked sectors saw notable traction:
Nifty Metal, Auto, and Pharma indices each recorded gains of around 1%.
Nifty IT was also up by nearly 1%, as lower US rates are often seen as a positive for US-driven revenue and client spending in the tech sector.
Nifty Bank closed 0.42% higher.
Expert View
The more accommodative stance by the US Fed is seen as easing concerns about dollar strength and potential capital outflows, creating a more constructive environment for domestic liquidity.
“The Fed’s decision has created a friendlier environment for Indian markets. A softer dollar reduces pressure on the rupee, and foreign investors tend to take a more positive view of emerging markets,” said a Mumbai-based market analyst.
Caution Remains
Despite the strong rebound, market players noted that the gains were slightly tempered by persistent concerns. The Indian Rupee slipped to a fresh record low, and persistent outflows by Foreign Institutional Investors (FIIs) remain an underlying concern, especially in the absence of a meaningful US-India trade deal.
However, the session marked a positive end to the recent slide, with investors capitalising on the global tailwind provided by the Fed’s policy shift.
