Did Sensex and Nifty Surge After US Fed Rate Cut?
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Synopsis
The Indian markets reacted positively to the US Fed's latest interest rate cut, reflecting strong investor sentiment. The Sensex and Nifty indices showed significant gains, bolstered by encouraging global cues and expectations of economic recovery. With sectoral indices also performing well, the outlook remains optimistic as analysts predict further momentum.
Key Takeaways
- The Sensex rose by 347 points to 83,041.
- The Nifty increased by 89 points to 25,419.
- US Fed cut rates by 25 basis points.
- Positive sentiment in the Asia-Pacific markets.
- Sectoral indices, especially IT, showed strong performance.
Mumbai, Sep 18 (NationPress) The Indian benchmark indices experienced a notable rise on Thursday, buoyed by favorable global signals following a 25 basis points rate cut by the US Federal Reserve.
As of 9:24 am, the Sensex climbed by 347 points or 0.42 percent to reach 83,041, while the Nifty increased by 89 points or 0.35 percent to settle at 25,419.
The Federal Reserve initiated a new cycle of interest rate reductions, lowering rates by 25 basis points to a target range of 4.0-4.25 percent, citing evolving risk factors in the economy. Fed officials forecast two more rate cuts this year, predicting rates may fall to 3.50-3.75 percent by the close of 2025.
These cuts were expected amid rising worries about a weak labor market and persistent inflation.
The broader market indices saw the Nifty Midcap 100 rise by 0.08 percent, and the Nifty Smallcap 100 surged by 0.68 percent.
Major gainers on the Nifty included Tech Mahindra (up 1.10 percent), ICICI Bank, TCS, Bajaj Finserv, and Trent. In contrast, Hindalco, Bajaj Finance, Apollo Hospitals, SBI, and SBI Life Insurance faced losses.
Among sectoral indices, Nifty IT emerged as the top performer, soaring 1.5 percent. The Nifty Realty index rose 0.66 percent and Nifty Pharma climbed 0.37 percent, with all sectors except metals trading positively.
The Nifty 50 maintained a strong position above 25,300 in the previous session, indicating psychological strength and investor confidence at these elevated levels.
Analysts noted that the index shows promising upward momentum, with resistance anticipated around the 25,400–25,500 range, while support remains at 25,000–24,900.
"Given the cooling labor market and the projected GDP growth of only 1.6 percent for 2025, it is likely we could see two more cuts this year," stated VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
The current rally in the Indian market is fueled by expectations of earnings recovery and positive developments in the India-US trade negotiations, he added.
Markets across the Asia-Pacific region were mostly in the green after US President Donald Trump announced that US-China trade negotiations are progressing positively. Major US indices saw slight declines overnight, with the Nasdaq down 0.33 percent, the S&P 500 losing 0.10 percent, and the Dow gaining 0.57 percent.
Most Asian markets reported strong gains in the morning session. China's Shanghai index rose 0.41 percent, Shenzhen surged 1.09 percent, Japan's Nikkei increased by 1.09 percent, while Hong Kong's Hang Seng Index dipped 0.08 percent. South Korea's Kospi added 1 percent.
On Wednesday, foreign institutional investors (FIIs) net sold equities worth Rs 1,124 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 2,293 crore.
Point of View
It's essential to highlight the resilience of the Indian markets amidst global economic shifts. The optimistic response to the US Fed's rate cut demonstrates the potential for growth and recovery, reinforcing the need for strategic investment and informed decision-making among investors.
NationPress
20/09/2025
Frequently Asked Questions
What prompted the rise in Sensex and Nifty?
The rise in the Sensex and Nifty was prompted by positive global cues following a 25 bps rate cut by the US Federal Reserve.
How much did the US Fed cut the rates?
The US Federal Reserve cut rates by 25 basis points, adjusting the target range to 4.0-4.25 percent.
What sectors were the top gainers?
The top gainers included the Nifty IT sector, which jumped 1.5 percent, along with positive performances from Nifty Realty and Nifty Pharma.
What is the short-term outlook for the Nifty 50?
The short-term outlook for the Nifty 50 shows potential upside momentum with resistance expected around 25,400–25,500 and support at 25,000–24,900.
How did foreign and domestic investors behave recently?
Recently, foreign institutional investors net sold equities worth Rs 1,124 crore, while domestic institutional investors were net buyers of Rs 2,293 crore.
