Sensex, Nifty soar on US Fed rate cut hopes

Snapping the three-day falling streak, benchmark Sensex rebounded by 1,022 points while Nifty reclaimed the 26,000 level on Wednesday on across-the-board buying aided by a rally in global peers amid growing hopes of a US Fed rate cut and fresh foreign fund inflows.

The 30-share BSE Sensex jumped 1,022.50 points or 1.21 per cent to settle at 85,609.51. During the day, it surged 1,057.18 points or 1.24 per cent to 85,644.19.

The 50-share NSE Nifty zoomed 320.50 points or 1.24 per cent to end at 26,205.30, just 10 points shy of its all time closing high. The broader index scaled record intra-day high of 26,277 on September 27, 2024.

In intra-day trade, Nifty rallied 330.35 points or 1.27 per cent to 26,215.15.

Increasing optimism surrounding a potential truce between Russia and Ukraine also bolstered the investor sentiment, experts said.

Among Sensex firms, Bajaj Finserv, Bajaj Finance, Tata Steel, Reliance Industries, Sun Pharma, Tata Motors Passenger Vehicles, Axis Bank and Infosys  were among the major gainers. Bharti Airtel and Asian Paints emerged as the laggards from the pack.

Market participation was broad-based, with metals, energy and IT leading the gains. Mid-cap and small-cap indices also advanced over 1 per cent.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index and Hong Kong’s Hang Seng index settled in positive territory. Kospi surged 2.67 per cent, Nikkei 225 index jumped 1.85 per cent and Hang Seng index climbed 0.13 per cent. Shanghai’s SSE Composite index, however, ended lower.

Markets in Europe were trading in the green. US markets ended higher on Tuesday.

“Indian markets staged an impressive rally on Wednesday, with broad-based buying across sectors reflecting the sharp risk-on sentiment in global equities.

“The upmove was supported by growing expectations of a US Federal Reserve rate cut in December, after the latest US economic releases — including September retail sales and producer price data — signalled softening demand and cooling inflation,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

Foreign Institutional Investors bought equities worth Rs 785.32 crore on Tuesday, and Domestic Institutional Investors (DII) also purchased stocks worth Rs 3,912.47 crore, according to exchange data.

The BSE midcap gauge jumped 1.32 per cent and smallcap index climbed 1.23 per cent.

Among sectoral indices, metal surged 2.08 per cent, oil & gas jumped 1.81 per cent, followed by energy (1.68 per cent), capital goods (1.65 per cent), services (1.63 per cent), power (1.59 per cent) and commodities (1.58 per cent).

BSE Telecommunication emerged as the only laggard.

A total of 2,800 stocks advanced while 1,371 declined and 154 remained unchanged on the BSE.

“On a global scale, market sentiment improved with rising expectations of a US Federal Reserve rate cut in December, alongside softer US yields and a weaker dollar. Furthermore, increasing optimism surrounding a potential truce between Russia and Ukraine is enhancing risk appetite, fostering a positive outlook for the upcoming year,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

Brent crude, the global oil benchmark, went up marginally by 0.03 per cent to USD 62.50 per barrel.

“Renewed optimism over a potential rate cut by the US Federal Reserve in December, along with expectations of a 25-basis-point repo rate cut by the Reserve Bank of India early next month, improved investor sentiment.

“Additionally, easing crude oil prices —driven by hopes of progress toward peace between Ukraine and Russia — provided further support,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

On Tuesday, the Sensex dropped 313.70 points or 0.37 per cent to settle at 84,587.01. The Nifty declined 74.70 points or 0.29 per cent to 25,884.80.