Nifty gains 110 points, Sensex surges 400 pts in opening as investors cheer Fed’s 25 bps rate cut

MUMBAI: Indian stock markets opened on a strong note on Thursday as investors welcomed the US Federal Reserve’s decision to cut interest rates by 25 basis points.

Both benchmark indices saw sharp gains at the opening, tracking positive global cues and optimism from the Fed’s dovish stance. The Nifty 50 index opened at 25,441.05, rising 110.80 points, or 0.44 per cent, while the BSE Sensex surged 415.21 points, or 0.50 per cent, to open at 83,108.92.

Analysts noted that the rate cut was widely expected, and the move is being seen as supportive for emerging markets, though foreign portfolio inflows into India may still take some time to recover. Banking and market expert Ajay Bagga said that the market reaction was broadly in line with expectations.

“Indian markets are pointing to some strength at the open. There was a Fed rate cut as expected. It was 25 bps as expected. Trump nominee to the Fed Board sought a 50 bps cut as expected. The commentary sounded dovish as the Fed pivoted to managing employment from concern over persistent inflation,” he said. He added that markets had already run up on hopes of a rate cut and further easing.

“Markets had run up on expectations of the rate cut and two more cuts in 2025 coming up. The Fed delivered on that. What did not go well was the Fed SEP or Dot Plot which showed just 1 cut in 2026 and 1 cut in 2027”, Bagga said. He also noted that tariffs have not yet significantly impacted U.S. inflation because goods were front-loaded earlier in the year, though inflationary pressures from tariffs are expected later.

Experts believe that foreign portfolio inflows into India will likely turn positive in the next three months or with fresh allocations at the start of the new year in January. Emerging markets, overall, may see enhanced inflows as the US dollar softens following the Fed’s rate cuts. For India, however, significant inflows are expected only after a stronger earnings recovery by the last quarter of calendar year 2025.

Broad-based buying was seen in Indian markets. On the NSE, the Nifty 100 rose 0.40 per cent, the Nifty Midcap 100 gained 0.34 per cent, and the Nifty Smallcap 100 surged 0.39 per cent in early trade. All major sectoral indices also opened higher. Nifty IT led the gains with a 0.97 per cent jump, followed by Nifty Media up 0.53 per cent, Nifty Pharma rising 0.36 per cent, Nifty Auto up 0.34 per cent, and Nifty FMCG gaining 0.23 per cent.

In Asia, most major markets were also trading in the green on Thursday. Japan’s Nikkei 225 climbed 1.36 per cent, Taiwan’s Weighted Index rose 0.8 per cent, and South Korea’s KOSPI gained over 1 per cent. The only exception was Hong Kong’s Hang Seng Index, which traded lower in early deals. (ANI)