Market Wrap: Sensex climbs over 310 points, Nifty tops 25,330 on India-U.S. trade talk progress, Fed rate cut hopes

Indian stocks finished higher Wednesday, with the Sensex and Nifty rising for a second straight session, lifted by optimism around progress in India-U.S. trade talks and expectations that the Federal Reserve will trim interest rates later in the day.

The S&P BSE Sensex rose 313.02 points, or 0.38%, to 82,693.71 at the close, while the NSE Nifty advanced 91.15 points, or 0.36%, to end at 25,330.25.

Top Movers

On the 30-share Sensex, State Bank of India, Bharat Electronics, Kotak Mahindra Bank, Maruti Suzuki and retailer Trent were among the top gainers, rising between 1% and 3%.

Broader markets also firmed, with small-caps climbing 0.7% and mid-caps adding 0.1%.

IT shares, which draw a large share of their revnue from the U.S., rose 0.7%, supported by expectations the Fed will deliver a 25-basis-point cut.

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Investors are also watching for signals of further easing later this year. Market experts said lower U.S. rates could make India more attractive to foreign investors by pulling down Treasury yields and the dollar.Separately, home-services platform Urban Company jumped 62% from its issue price of Rs 103 in its stock-market debut.The Nifty has now advanced in ten of the past eleven sessions and sits just 3.6% below its record of 26,277.35 touched in September last year.

Expert views

Indian equities maintained their upward momentum, aided by the revival of India–U.S. trade talks and efforts to strengthen bilateral ties, said Vinod Nair, Head of Research at Geojit Investments, adding that a stable INR added to investor confidence, while global markets traded cautiously ahead of the US Fed’s FOMC decision.

“Domestically, equities remained in risk-on mode, supported by expectations of a rate cut and improving macro fundamentals. Strong domestic inflows, currency stability, and favourable geopolitical dynamics continue to create a constructive near-term outlook for the market,” said Nair.

On the index front, the Nifty is now inching towards the 25,500 mark, aided by renewed strength in banking and rotational buying across sectors, said Ajit Mishra, SVP of Research at Religare Broking.

“We recommend continuing with a “buy on dips” approach, with support placed around the 25,050–25,150 zone, while keeping position sizes moderate given the likelihood of higher volatility due to global events,” said Mishra.

Global Markets

World stocks hovered near record highs Wednesday as investors awaited a widely expected Federal Reserve rate cut, even as questions about central bank independence lingered.

European shares opened higher, while U.S. futures were little changed to slightly firmer. Japan’s Nikkei slipped from recent peaks, and the dollar steadied after a sharp drop the previous day on easing bets. In Asia, Hong Kong’s Hang Seng Index jumped 1.8%, helped by signs of progress on a deal that would allow TikTok to continue operating in the U.S.

The Fed is expected to lower its benchmark rate by a quarter point to a 4.00%-4.25% range later in the day, with markets focused on Chair Jerome Powell’s guidance on the path for further policy moves.

Gold prices eased 0.6% to $3,665 an ounce, retreating after topping $3,700 for the first time in the prior session.

Crude Impact

Oil prices pulled back Wednesday after gaining more than 1% in the prior session, though geopolitical tensions kept a floor under the market. Traders are also awaiting the Federal Reserve’s expected rate cut later in the day.

Brent crude futures fell 41 cents, or 0.6%, to $68.06 a barrel by mid-morning London time. U.S. West Texas Intermediate slipped 37 cents, or 0.6%, to $64.15.

Rupee vs Dollar

The Indian rupee firmed Wednesday, buoyed by a weaker dollar and improved sentiment from progress in trade discussions with the U.S., as investors awaited the Federal Reserve’s rate decision. The currency touched an intraday high of 87.73 before settling at 87.8150 against the dollar, up 0.27%, its strongest single-day gain since August 19.

The dollar index, which measures the greenback against six major peers, inched up 0.2% after sliding Tuesday to its weakest level since early July.

(With inputs from agencies)

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