Indian Benchmarks Open Higher on US-India Trade Optimism Ahead of Fed Decision

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Indian Benchmarks Open Higher on US-India Trade Optimism Ahead of Fed Decision

The Nifty 50 added 0.17 per cent to 25,110.75, while the BSE Sensex rose 0.2 per cent to 81,956.51 as of 09:28 a.m. IST.

Market Update at 10:30 AM: India’s stock benchmarks opened marginally higher on Tuesday, supported by optimism over progress in US-India trade negotiations and ahead of the Federal Reserve’s upcoming rate decision.

The Nifty 50 added 0.17 per cent to 25,110.75, while the BSE Sensex rose 0.2 per cent to 81,956.51 as of 09:28 a.m. IST. Thirteen of the 16 major sectors advanced at the open, though gains were largely modest. The broader market also showed improvement, with the Smallcap index up about 0.5 per cent and the  Midcap index rising 0.2 per cent.

Investors are positioning for a potential Fed rate cut on Wednesday, which could weaken the USD and attract flows into emerging markets such as India.

The market optimism comes ahead of scheduled trade talks between India and the US, aimed at resolving issues after the US imposed punitive tariffs on New Delhi for buying Russian oil. A breakthrough in these talks could positively impact Large-Cap and Mid-Cap stocks, while Small-Cap and dividend-paying companies may also benefit from increased investor confidence.

Meanwhile, in a related development, US and Chinese officials announced a framework agreement to shift control of short-video app TikTok to US ownership. The arrangement is expected to be confirmed during a Friday call between US President Donald Trump and Chinese President Xi Jinping, easing concerns in global markets.

 

Pre-Market Update at 7:30 AM: On Tuesday, September 16, the Indian equity market benchmarks, the Sensex and Nifty 50, are expected to open lower with caution. India is set to resume trade discussions with the US, with Washington’s chief negotiator Brendan Lynch scheduled to meet Rajesh Agrawal, special secretary in the commerce department, to advance bilateral trade negotiations.

As of 7:12 AM, the GIFT Nifty was trading near 25,161, down 19 points, reflecting a muted start. The Federal Open Market Committee (FOMC) is widely expected to cut interest rates by 25 basis points during its meeting on September 16–17. Asian markets traded mixed, while US markets closed higher on Monday.

On Monday, September 15, Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth Rs 1,268.59 crore. In contrast, Domestic Institutional Investors (DIIs) remained net buyers for the 15th straight session, purchasing shares worth Rs 1,933.33 crore.

The Indian equity market closed weaker on September 15, ending a winning streak. The BSE Sensex declined by 119 points, or 0.15 per cent, to 81,786, while the NSE Nifty 50 slipped 45 points, or 0.18 per cent, to 25,069, falling below the 25,100 mark. The correction came as investors awaited signals from the Federal Reserve’s policy outcome. India’s unemployment rate eased to 5.1 per cent in August, down from 5.2 per cent in July and 5.6 per cent in June, as per the Periodic Labour Force Survey (PLFS).

On Monday, US markets closed higher with the S&P 500 and Nasdaq hitting record intraday levels. The Dow Jones Industrial Average added 49.23 points, or 0.11 per cent, to 45,883.45. The S&P 500 gained 30.99 points, or 0.47 per cent, to 6,615.28, while the Nasdaq advanced 207.65 points, or 0.94 per cent, to 22,348.75. Investors are now focused on the FOMC meeting, with rising expectations of a 25-basis-point rate cut amid labor market concerns. US President Donald Trump also said trade talks with China had “gone very well” and hinted at a potential deal addressing US concerns over TikTok’s ownership.

Gold hovered near record levels at around USD 3,670 per ounce ahead of the Fed’s meeting. Crude oil prices stayed firm, with Brent futures trading near USD 67.5 per barrel and WTI around USD 63.3 per barrel, supported by concerns over supply disruptions from Ukrainian strikes on Russian infrastructure and increased US pressure on buyers of Russian crude.

For today, RBL Bank, HFCL, Angel One and Oracle Financial Services Software will remain on the F&O ban list.

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