Image Source: The Economic Times
India’s flagship equity index, the Nifty 50, provisionally closed 0.36% higher, rebounding on positive investor sentiment linked to the U.S. Federal Reserve’s recent rate cut and encouraging domestic economic developments. The index’s gain reflects cautious optimism as markets digest global monetary policy signals alongside India’s robust corporate earnings and policy reforms.
Session Highlights and Sectoral Performance
The Nifty 50 index advanced driven by strong performances across index heavyweights, including IT, financials, and consumer discretionary sectors. Public sector banks and select private lenders gained traction amid better-than-expected Q1 earnings and easing bond yields.
Investors responded favorably to positive cues from the U.S. Federal Reserve lowering interest rates by 25 basis points, marking the first cut since late 2024, aimed at supporting the labor market amid moderating inflation pressures.
External and Domestic Catalysts
Global investor sentiment improved on the Fed’s dovish stance, enhancing risk appetite for emerging markets such as India. Meanwhile, progress in India’s GST reforms and ongoing bilateral trade dialogues with key partners bolstered market confidence in the investment environment.
The sovereign bond market’s relative stability also lifted equities as cost of capital pressures eased, encouraging fresh buying in growth-sensitive sectors.
Technical Outlook and Market Expectations
Technically, the Nifty index tested resistance levels near 25,400 points, with market breadth indicating healthy participation across sectors. Analysts expect the momentum to sustain provided global macroeconomic conditions remain favorable and domestic policy measures continue to support economic recovery.
Short-term volatility is anticipated due to factors such as geopolitical developments, corporate earnings updates, and global commodity price movements.
Investor Commentary
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “The Fed’s rate cut has provided much-needed relief for equities, especially emerging markets like India. Domestic structural reforms continue to underpin investor confidence, making the Nifty resilient despite global uncertainties.”
Shrikant Chouhan, Head of Equity Research at Kotak Securities, added, “Sectoral performance within Nifty reflects underlying economic recovery, with banking and IT shining. The market remains focused on forward earnings guidance and policy clarity.”
Sources: The Hindu BusinessLine, MoneyControl, NSE India, Market Outlook
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