Indian equity indices opened Thursday’s trading session on a muted note with a positive bias after the US Federal Reserve cut the key lending rates by 25 basis points to 3.25% from 3.5%. This led to a rise in Indian tech stocks in early trade hours. After a brief choppy spell, the Nifty is now trending higher. The NSE Nifty 50 is firm above 25,800. The BSE Sensex is now up 200 points. Eternal is one of the top gainers.
The Bank Nifty opened 4 points or 0.01% higher at 58,964. However, the small and mid-cap stocks opened in the red. The Nifty Midcap opened 68 points or 0.11% lower at 58,940.
“Indian market futures were up over 100 points during the post-Fed recovery in markets and this morning in Asia. Those gains have halved for now, just before the markets open. Overall, with positive outcomes from the RBI and the US Fed, Indian markets are well-positioned for a year-end upswing. Expectations are low for the present visit of a US Trade negotiation delegation,” said market veteran Ajay Bagga.
“The Federal Reserve delivered a widely anticipated 25 bps rate cut to 3.50–3.75% in a 9–3 vote (Governor Miran dissenting for a 50 bps cut; Goolsbee and Schmid preferring no change), but surprised markets by effectively restarting quantitative easing under the label of ‘reserve management purchases’,” said Deepak Agrawal, CIO-Debt at Kotak Mutual Fund. Given the slight dovish tint in the FOMC, Indian government bonds shall ease as well.
Let’s take a look at the key factors to watch out for today’s trading session
Early gainers and laggards
In early trade, among the Nifty 50, top gainers at this hour were Tata Steel, Infosys, Eicher Motors, Wipro, and HCL Technologies. On the flip side, the key laggards in the Nifty 50 pack included Titan, Power Grid Corp, HDFC Life Insurance, IndiGo, and Bharti Airtel.
Major movers on Thursday
The stocks that were the major movers in the opening trade included Reliance Industries, M&M, ITC, Infosys, and Koak Mahindra Bank, which were the major movers in the morning trade.
US Fed’s rate cut decision
The US Federal Reserve slashed key borrowing rates by 25 basis points, as per the decision taken on the two-day FOMC meeting. The committee decided to lower the range by 0.25 percentage points to 3.5%–3.75%. The outlook uncertainty remains high. The central bank said downside employment risks have increased, and it is watching both sides of its dual mandate.