How is the Indian Stock Market Reacting to the US Fed Policy Decision?
Click to start listening
Synopsis
On June 19, the Indian stock market remained steady as investors reacted to the US Federal Reserve's decision to maintain interest rates. With mixed signals from global markets, analysts are closely monitoring geopolitical tensions that could impact future trading.
Key Takeaways
- The Indian benchmark indices opened nearly unchanged.
- US Federal Reserve maintained interest rates, influencing market sentiment.
- Key sectors such as IT and pharma are witnessing selling pressure.
- Geopolitical factors, particularly in West Asia, may impact market stability.
- FIIs and DIIs remain active buyers in the market.
Mumbai, June 19 (NationPress) The Indian benchmark indices started the trading day nearly unchanged on Thursday, influenced by the US Federal Reserve policy decision and lackluster cues from Asian markets. Selling pressure was evident across the IT, PSU bank, FMCG, and pharma sectors during the initial trading hours.
As of 9:34 AM, the Sensex was up by 1.66 points, or 0.00%, at 81,446.32, while the Nifty gained 9.90 points, or 0.04%, reaching 24,821.95.
The Nifty Bank index increased by 43.15 points, or 0.08%, to 555,871.90. The Nifty Midcap 100 index, however, was trading at 58,068.85, down by 40.35 points, or 0.07%. Conversely, the Nifty Smallcap 100 index rose to 18,404.05, up by 25.60 points, or 0.14%.
Analysts noted that the US Federal Reserve decided to keep interest rates steady. In their announcement, they hinted at the possibility of two rate cuts this year, although there is a growing faction that believes no cuts will occur.
Mandar Bhojane from Choice Broking commented, "Additionally, the Fed has slightly adjusted its forecast, now projecting a single quarter-point cut in both 2026 and 2027."
Experts predict that the Nifty will likely remain within the 24,500-25,000 range until there are notable developments regarding the Israel-Iran conflict. If tensions ease, the Nifty may break above this range, while further escalation, particularly regarding the Strait of Hormuz, could threaten support levels.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, warned, "If tensions escalate, especially concerning the Strait of Hormuz and rising crude prices, maintaining the 24,500 support level could be challenging. Keep an eye on developments in West Asia."
In the Sensex pack, Tech Mahindra, IndusInd Bank, Infosys, HCLTech, PowerGrid, and Tata Steel were among the leading losers, while Titan, M&M, Kotak Mahindra Bank, and Tata Motors emerged as top gainers.
On June 18, foreign institutional investors (FIIs) were net buyers, acquiring equities worth Rs 890 crore, while domestic institutional investors (DIIs) also remained active buyers, investing Rs 1,091 crore.
Asian markets, including Bangkok, Japan, Seoul, Jakarta, Hong Kong, and China, were trading in the negative.
In the US, markets closed mixed following the US Federal Reserve policy decision and remarks from Federal Reserve Chairman Jerome Powell.
The Dow Jones closed at 42,171.66, down 44.14 points, or 0.10%. The S&P 500 fell by 1.85 points, or 0.03%, finishing at 5,980.87, while the Nasdaq closed at 19,546.27, rising by 25.18 points, or 0.13%.
Point of View
It is imperative to recognize the delicate balance the Indian stock market maintains amid global economic fluctuations. While the US Federal Reserve's decisions impact our markets, local factors such as geopolitical tensions also play a crucial role. The Nation's approach is to provide transparent insights, empowering our readers to navigate these changes effectively.
NationPress
19/06/2025
Frequently Asked Questions
What factors influence the Indian stock market's performance?
The Indian stock market is influenced by various factors, including global economic conditions, domestic policies, and geopolitical tensions. Decisions by major entities like the US Federal Reserve and local economic indicators also play crucial roles.
How did foreign institutional investors contribute to the market recently?
Recently, foreign institutional investors (FIIs) have shown confidence in the Indian market by being net buyers, acquiring equities worth Rs 890 crore, signaling positive sentiment towards Indian stocks.
What sectors are currently facing challenges in the Indian stock market?
Currently, sectors such as IT, PSU banks, FMCG, and pharma are facing selling pressure, indicating potential concerns among investors in these areas.
