Indian Equities Break Losing Streak as Nifty Surges on Fed Rate Cut Optimism

Indian equity markets bounced back strongly on Thursday, ending a three-day downtrend with solid gains across major indices. The National Stock Exchange’s Nifty50 index advanced 140.55 points to close at 25,898.55, representing a 0.55% gain, while the BSE Sensex climbed 426.86 points to settle at 84,818.13, up 0.51% on the day.

The rally was primarily fueled by the Federal Reserve’s decision to trim interest rates by 25 basis points, which aligned with market expectations. Fed Chair Jerome Powell’s subsequent remarks suggesting the central bank would adopt a cautious approach before future rate adjustments—and indicating that additional rate hikes are not part of the baseline scenario—bolstered investor sentiment. Market participants are interpreting Fed officials’ projection of just one further rate cut through 2026 as potentially conservative, with traders positioning for more aggressive easing cycles ahead.

On the trade front, sentiment received a boost from optimistic signals regarding U.S.-India negotiations. V. Anantha Nageswaran, India’s chief economic advisor, indicated during a Bloomberg TV interview that most outstanding trade disputes between the two nations have been resolved, with an agreement expected by March 2025. Despite the rupee hitting an all-time low against the U.S. dollar, equities found support and maintained upward momentum throughout the session.

Sectoral performance was broadly constructive, with automobiles, IT, pharmaceuticals, consumer durables and financial services leading gains. In the Nifty benchmark, standout performers included Adani Enterprises and Jio Financial Services, each gaining approximately 2.65%. Other notable gainers were Dr. Reddy’s Laboratories, Grasim Industries, Cipla and Shriram Finance, all posting substantial advances. Within the Sensex, Eterna topped the gainer list with a 2.75% surge, followed by Tata Steel and Kotak Bank with gains of 2.56% and 2.45% respectively. UltraTech Cement, Maruti Suzuki, Sun Pharma, Tech Mahindra, HDFC Bank and Tata Motors gained between 1% and 1.3%.

Meanwhile, Asian Paints, Bharti Airtel, Bajaj Finance and ICICI Bank registered declines ranging from 0.3% to 1%. Market breadth remained positive with 2,448 stocks advancing on the BSE against 1,743 declining issues, while 165 names remained unchanged. This breadth signal suggests underlying market strength beyond headline-grabbing individual movers.