Sensex, Nifty Hit All-Time High After US Fed Announces Rate Cut

India's frontline indices opened at an all-time high on Thursday after the US Federal Reserve cut rates by a wider 50 basis points and kicked off an easing cycle that is likely to see rates fall further. At 9.39 a.m., Sensex was up 687 points or 0.83 per cent at 83,635 and Nifty was up 197 points or 0.78 per cent at 25,575.

Banking stocks led the markets. Nifty Bank surged by 468 points or 0.89 per cent at 53,246.

The Sensex and Nifty reported an all-time high in early trade of 83,684 and 25,587 respectively.

Most of the shares of Sensex were in the green. NTPC (NS:NTPC), Wipro (NS:WIPR), Axis Bank (NS:AXBK), Tech Mahindra (NS:TEML), Infosys (NS:INFY), Bajaj Finance (NS:BJFN), TCS (NS:TCS), Kotak Mahindra Bank (NS:KTKM), Tata Motors (NS:TAMO), HDFC Bank (NS:HDBK), TCS, and Sun Pharma (NS:SUN) were significant gainers.

Buying was visible in the smallcap and midcap stocks. The Nifty Midcap 100 index closed at 60,144, with a rise of 391 points, or 0.65 per cent. The Nifty Smallcap had gained 108 points, or 0.56 per cent, at 19,498.

Market experts aver, "The big Fed rate cut by 50 bp has the potential to take equity markets into a consolidation phase with an upward bias. The Fed chief Powell's remark that we have gained greater confidence that inflation is moving sustainably towards 2 per cent is a very optimistic commentary of the US economy."

"The Fed rate cuts will help pave the way for similar moves in India. The easing of CPI inflation to below the RBI's target of 4 per cent over the last two months will also ease the path for rate cuts. In that sense, there is a possibility of two 25bp rate cuts in India before March 2025. In short, the market scenario is turning favourable for rate-sensitives, particularly banking," they added.

Most Asian markets are trading in a very brisk manner. Tokyo, Shanghai, Hong Kong and Jakarta are trading in green. US markets closed with marginal loss on Wednesday.
Foreign Institutional Investors have infused equities worth Rs 1,153 crore on September 18 while domestic institutional investors also bought equities worth Rs 152 crore on the same day.