What Caused Sensex and Nifty to Rebound After Fed Rate Cut?
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Synopsis
The Indian stock markets made a notable recovery on Thursday, breaking a three-day losing streak sparked by the US Federal Reserve's 25-basis-point interest rate cut. Investor sentiment surged, leading to a significant rise in key indices and numerous stocks. Learn how this decision impacted the market and the key stocks that drove the rebound.
Key Takeaways
- Sensex closed up by 426.86 points.
- Nifty increased by 140.55 points.
- Key stocks like Tata Steel and Maruti Suzuki led the recovery.
- Broader markets showed strength with Nifty Midcap 100 and Nifty SmallCap 100 gaining.
- Sector performance varied, with Nifty Media being the biggest loser.
Mumbai, Dec 11 (NationPress) The Indian stock exchanges saw a significant rebound on Thursday, putting an end to a three-day decline, following the announcement of a 25-basis-point interest rate cut by the US Federal Reserve.
This decision greatly improved investor confidence and resulted in a rise in key indices. By the end of the trading day, the Sensex rose by 426.86 points to settle at 84,818.13, reflecting a gain of 0.51 percent.
Meanwhile, the Nifty increased by 140.55 points, or 0.55 percent, concluding at 25,898.55.
Experts noted, “For continued upward movement, a decisive closing above 25,950–26,000 is crucial; achieving this breakout could pave the way towards 26,150–26,250, where it faces upper channel resistance coupled with previous swing highs.”
“On the downside, maintaining support levels at 25,735–25,700 is critical, with secondary support positioned at 25,600,” analysts highlighted.
A number of key stocks contributed to the market's recovery. Tata Steel, Eternal, Kotak Mahindra Bank, UltraTech Cement, Maruti Suzuki India, Sun Pharma, Tech Mahindra, and TMPV were among the standout performers on the Sensex, each climbing as much as 2.5 percent.
Conversely, stocks like Asian Paints, Bajaj Finance, Axis Bank, Power Grid, ICICI Bank, and Titan experienced declines.
The broader market also showed strength, with the Nifty Midcap 100 index appreciating by 0.97 percent, while the Nifty SmallCap 100 surged 0.81 percent, indicating positive movement beyond the main indices.
Sector performance varied, with the Nifty Media index being the largest loser, down by 0.9 percent. The Nifty Oil and Gas index also faced a slight decline of 0.03 percent.
On a positive note, there was strong buying interest in metal and auto shares, with the Nifty Metal and Nifty Auto indices rising by 1.06 percent and 1.11 percent, respectively.
The Pharma and Consumer Durables indices also closed nearly 1 percent higher, bolstering the overall market recovery.
Analysts indicated that the domestic markets rallied broadly in response to the Fed's anticipated 25-bps rate cut against a backdrop of high inflation in the US.
“The decrease in US 10-year yields suggests a reduction in potential foreign institutional investor outflows, which enhanced market sentiment,” experts commented.
Point of View
I observe the recent resurgence in the Indian stock market as a positive sign for investors. The Fed's rate cut has not only lifted key indices but also improved market sentiment. It's crucial for investors to remain vigilant about support levels and market trends, as these fluctuations can significantly impact financial decisions.
NationPress
11/12/2025
Frequently Asked Questions
What is the significance of the Fed's rate cut?
The Fed's rate cut lowers borrowing costs, encouraging spending and investment, which can boost economic growth.
How did the Indian stock market react to the news?
The Indian stock market rebounded significantly, with key indices like Sensex and Nifty rising after the announcement.
Which sectors performed well during this rebound?
Sectors such as metal and auto saw strong buying interest, with both the Nifty Metal and Nifty Auto indices posting gains.
What should investors watch for next?
Investors should monitor key resistance levels and overall market sentiment to gauge future movements.
Are there any stocks to keep an eye on?
Stocks like Tata Steel, Kotak Mahindra Bank, and UltraTech Cement showed strong performance and may be worth watching.
