Indian Benchmark Indices Edge Higher After Three Sessions of Losses on Fed’s 25-Point Rate Cut

Market Update at 10:20 AM: India’s equity benchmarks moved slightly higher on Thursday, snapping a three-day losing streak, supported by gains in information technology stocks after the U.S. Federal Reserve announced a 25-basis-point rate cut.

The Nifty 50 rose 0.1 per cent to 25,781.6, while the BSE Sensex added 0.11 per cent to 84,472.02 as of 9:23 a.m. IST.

Information technology companies, which derive a large share of revenue from the U.S., gained 0.7 per cent as lower U.S. rates typically strengthen client spending and improve the demand outlook for Indian IT services. A reduction in U.S. interest rates also tends to make emerging markets like India more attractive for foreign investors.

The metal index climbed 0.4 per cent, tracking stronger global metal prices driven by a weaker USD. A softer dollar generally makes metals cheaper for buyers using other currencies, supporting demand.

Meanwhile, broader market indices such as Small-Caps and Mid-Caps opened flat, indicating selective participation despite the positive sentiment in headline benchmarks.

Pre-Market Update at 7:40 AM: Indian equity benchmarks Sensex and Nifty 50 are likely to open on a positive note on Thursday, December 11, supported by firm global cues after the U.S. Federal Reserve announced its third consecutive rate cut of 0.25 basis points. The decision lowered the key policy rate to around 3.6 per cent, the lowest level in nearly three years, though the Fed signaled a slower pace of future easing.

The GIFT Nifty was trading near the 25,960 level, indicating a premium of about 125 points and suggesting a strong start for domestic markets. Asian equities also traded higher in early deals, reacting positively to the Fed’s policy move and adding to the upbeat sentiment for Indian equities.

India–U.S. economic ties were in focus after U.S. Representative Bill Huizenga highlighted the growing strategic and economic importance of the relationship. Speaking at a House Foreign Affairs Subcommittee hearing, he pointed to rising interest from American companies in India’s fast-growing economy and stressed the need for fair market access. He added that a fresh trade agreement under President Trump and Prime Minister Modi could further strengthen bilateral cooperation.

These comments came alongside meetings between India’s Foreign Secretary Vikram Misri and U.S. Under Secretary Allison Hooker, who is on a five-day visit aimed at boosting strategic and economic engagement between the two countries.

On Wednesday, December 10, Foreign Institutional Investors remained net sellers, offloading equities worth Rs 1,651.06 crore. In contrast, Domestic Institutional Investors continued to support the market, buying equities worth Rs 3,752.31 crore, marking their 34th consecutive session of net inflows.

Indian markets ended lower on Wednesday as investors booked profits ahead of the U.S. Federal Reserve decision. The Nifty 50 declined 81.65 points, or 0.32 per cent, to close at 25,758, while the Sensex fell 275.01 points, or 0.32 per cent, to end at 84,391.27. This marked the third straight session of losses, with both indices down around 1.6 per cent over the last three sessions. India VIX remained largely unchanged.

Sectorally, Nifty IT was the top loser, slipping 0.89 per cent, followed by PSU Bank and Financial Services stocks. Nifty Media gained 0.48 per cent to lead the gainers, while metal and pharma stocks also closed higher. Broader markets underperformed, with the Nifty Midcap 100 falling 1.12 per cent and the Nifty Smallcap 100 declining 0.90 per cent.

U.S. equity markets ended higher on Wednesday after the Federal Reserve delivered the widely expected 25-basis-point rate cut. The S&P 500 rose 46.17 points, or 0.67 per cent, to 6,886.68, just shy of its all-time high. The Dow Jones Industrial Average surged 497.46 points, or 1.05 per cent, to 48,057.75, while the Nasdaq Composite gained 77.67 points, or 0.33 per cent, to close at 23,654.16.

Fed Chair Jerome Powell said the central bank is now well-positioned to assess inflation and labour market trends after multiple rate cuts over the past two years. Policymakers’ latest projections suggest only one additional rate cut next year.

The U.S dollar weakened against major currencies following the Fed’s decision and its cautious outlook. The dollar slipped 0.8 per cent against the Swiss franc and 0.6 per cent against the Japanese yen. The euro strengthened 0.6 per cent, while the dollar index fell 0.6 per cent to 98.66.

Gold prices edged higher, with spot gold rising 0.3 per cent to USD 4,242.39 per ounce, while February futures climbed 1.1 per cent to USD 4,271.30. Spot silver gained 0.9 per cent to USD 62.31 per ounce and remains up 113 per cent so far this year, supported by strong industrial demand and declining inventories.

Oil prices extended gains for a second session amid supply concerns after the U.S. seized a sanctioned tanker near Venezuela. Brent crude rose 0.4 per cent to USD 62.48 per barrel, while U.S. West Texas Intermediate increased 0.6 per cent to USD 58.79.

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.