Stock Market Update: Nifty50 Surpasses 25,400 as BSE Sensex Rises Over 350 Points Following US Fed Rate Cut
Stock markets in India experienced a positive start on Monday, buoyed by favorable global cues following the recent interest rate cut by the US Federal Reserve. The Nifty50 index surged past 25,400, while the BSE Sensex gained over 350 points. As of 9:16 AM, Nifty50 was trading at 25,421.80, reflecting an increase of 92 points or 0.36%, and BSE Sensex stood at 83,046.31, up 353 points or 0.43%. Market analysts anticipate a continued upward trend, driven by optimistic trade negotiations and the impact of the Fed’s rate cut on global liquidity.
Market Reactions to Fed Rate Cut
The recent decision by the US Federal Reserve to lower interest rates by 25 basis points has sparked a wave of optimism in the Indian stock market. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that this rate cut is viewed as a “risk management cut” amid uncertainties surrounding economic activity, unemployment, and inflation. He highlighted that the cooling labor market and a modest GDP growth projection for 2025 could lead to further cuts later this year. This softening of interest rates is expected to create a favorable environment for a bullish market.
Impact on Indian Stock Market
Despite the Fed’s decision, experts believe that the Indian stock market will remain largely unaffected. The ongoing market rally is primarily fueled by expectations of an earnings revival and positive developments in India-US trade negotiations. The Bank Nifty index has shown resilience, and the fair valuations of banking stocks are likely to attract more institutional investments. Analysts are optimistic that these factors will contribute to sustained growth in the market.
Global Market Trends
In global markets, the Nasdaq and S&P 500 indices faced declines amid volatile trading following the Fed’s anticipated rate cut. Chair Jerome Powell’s remarks on labor market weaknesses added to the uncertainty. Conversely, the Dow Jones Industrial Average saw gains after fluctuating during Powell’s address. Oil prices remained stable, reflecting the potential for increased demand as borrowing costs decrease due to the Fed’s rate reduction.
Investment Activity
On the domestic front, foreign portfolio investors sold shares worth Rs 1,124 crore on Wednesday, while domestic institutional investors made net purchases amounting to Rs 2,293 crore. This mixed investment activity indicates varying confidence levels among different investor groups in the current market landscape. As the market continues to react to global economic indicators and domestic developments, stakeholders remain vigilant for further opportunities.
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