Indian Benchmark Indices Open Higher on Friday Amid Fed Rate Cut and Wall Street Gains

Market Update at 9:30 AM: Indian shares opened higher on Friday, building on the previous session’s rebound after the U.S. Federal Reserve’s rate cut, while investors awaited domestic inflation data due later in the day.

The Nifty 50 rose 0.28 per cent to 25,971.2, and the BSE Sensex added 0.27 per cent to 85,051.03 as of 9:15 a.m. IST. All major sectors advanced at the open, reflecting broad-based optimism in the market. Small-Cap stocks gained 0.4 per cent, while Mid-Caps rose 0.3 per cent.

Other Asian markets also showed strength, with indices up 0.6 per cent. Overnight, Wall Street equities posted gains, with the S&P 500 achieving a record closing high. The U.S. dollar declined following the Fed's rate decision and accompanying commentary, providing a positive backdrop for emerging markets, including India.

On Thursday, both the Nifty and Sensex had gained about 0.5 per cent each, rebounding after a three-session slide. Meanwhile, the Indian rupee slumped to a record low against the USD, pressured by persistent foreign outflows and delays in achieving meaningful progress in the India-U.S. trade deal.

Pre-Market Update at 7:40 AM: Indian equity benchmarks are poised for a strong start on Friday, December 12, after global sentiment improved significantly following record closes in the Dow Jones and S&P 500. The GIFT Nifty traded near 26,126, showing a premium of about 100 points and signalling a firm opening for domestic markets. Early Asian trades also moved higher, reflecting Wall Street’s upbeat reaction to the U.S. Federal Reserve’s latest rate cut.

A key geopolitical highlight came from a conversation between Prime Minister Narendra Modi and U.S. President Donald Trump, where both leaders reviewed the progress in the India–U.S. strategic partnership. Discussions covered cooperation in trade, advanced technologies, Defence, energy and security, reinforcing ongoing speculation about a potential bilateral trade agreement.

Institutional activity on Thursday, December 11, remained mixed. Foreign Institutional Investors (FIIs) were net sellers, pulling out Rs 2,020.94 crore from Indian equities. In contrast, Domestic Institutional Investors (DIIs) continued their strong inflow streak, purchasing Rs 3,796.07 crore and marking their 35th consecutive session of net buying.

Markets closed higher on Thursday following the Federal Reserve’s 25 bps rate cut, which lifted global sentiment. The Nifty 50 climbed 140.55 points (0.55 per cent) to 25,898.55, while the Sensex advanced 426.86 points (0.51 per cent) to 84,818.13, ending a three-day losing streak. Volatility eased as India VIX slipped 4.7 per cent. Broader markets outperformed, with the Nifty Midcap 100 up 0.97 per cent and the Nifty Smallcap 100 gaining 0.81 per cent. Among sectors, 10 of 11 indices closed in the green, led by Nifty Auto and Nifty Metal with gains of 1.11 per cent and 1.06 per cent respectively. Nifty Media was the lone underperformer, slipping 0.09 per cent.

On Wall Street, the Dow and S&P 500 scaled fresh record highs on Thursday. The S&P 500 hovered near a one-month high as investors rotated into financial and material stocks amid valuation concerns surrounding major AI-driven companies. The Nasdaq, however, dipped 0.25 per cent due to weakness in tech shares following soft guidance from Oracle. The Dow jumped 646.26 points (1.34 per cent) to 48,704.01, the S&P 500 added 14.32 points (0.21 per cent) to 6,901.00, while the Nasdaq Composite slipped 60.30 points to 23,593.86.

Globally, the Bank of Japan is expected to raise interest rates next week, setting up its first tightening move since January after assessing the economic impact of Trump’s tariff measures. Meanwhile, the U.S. trade deficit narrowed 10.9 per cent in September to USD 52.8 billion, its smallest level since 2020, as exports rose 3.0 per cent to USD 289.3 billion.

Currency markets saw the U.S. dollar extend its decline to multi-month lows against major counterparts, including the euro, Swiss franc and pound. The franc strengthened after the Swiss National Bank held rates steady, pushing the dollar down 0.6 per cent to its weakest level since mid-November. U.S. Treasury yields also continued to fall for a second straight session after the Fed’s dovish stance.

Gold prices eased 0.2 per cent on Friday as traders booked profits after the metal touched a seven-week high. Spot gold hovered near USD 4,277.64 per ounce. Silver dipped 0.5 per cent to USD 63.31 after briefly hitting a record USD 64.31 a day earlier. Silver remains among the top-performing commodities of the year, surging 119 per cent on strong industrial demand, tightening supply and its recent inclusion in the U.S. critical minerals list.

Oil prices rebounded from their lowest close in nearly two months, supported by improving sentiment across global markets. West Texas Intermediate moved toward USD 58 per barrel after a previous 1.5 per cent drop, while Brent traded above USD 61. Despite the recovery, crude remains down nearly 20 per cent for the year amid oversupply concerns. The International Energy Agency reiterated expectations of a record surplus, noting global inventories have climbed to a four-year high.

For today, Sammaan Capital and Bandhan Bank will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.