- Sensex hits record high of 84,000; Nifty crosses 25,900.
- Investors show renewed interest in consumption, auto, and realty sectors.
- Rupee strengthens to 83.53, buoyed by dollar weakness and market resilience.
After a slow start, Indian markets surged following a surprise 50 basis points rate cut by the US Federal Reserve. This move soothed concerns about a US economic slowdown and spurred buying across various sectors, pushing Sensex beyond 84,000 and Nifty to a new high.
Investors have rotated back into large-cap stocks, especially in sectors such as consumption, auto, and finance, which had previously been under pressure.
Market Momentum: Fed Rate Cut Boosts Indian Equities
The US Federal Reserve’s unexpected 50 bps rate cut has triggered a strong response in Indian markets. After initial hesitation, the Sensex reached an all-time high of 84,000, while Nifty surged to 25,900. This rally is attributed to easing concerns over a potential US recession, fueled by better-than-expected jobless data and a soft economic landing.
Sectoral shifts are prominent as investors gravitate toward large-cap stocks, particularly in sectors like consumption and real estate, which had seen selling pressure earlier. The strong market performance has lifted sentiment across the board, bolstering optimism for further gains.
The rupee has strengthened against the dollar, trading at 83.53 as the dollar index dipped to its lowest point in a year. This strength is supported by foreign inflows and sustained investor confidence, further stabilizing the domestic currency amid global volatility.
Analysts suggest that the current bullish momentum will persist, with technical indicators pointing to Nifty reaching 26,000. The rupee’s resilience is providing added support to the overall positive market environment, encouraging a tactical approach to stock picking.
The recent bullish momentum in Indian markets, driven by the Fed’s rate cut and favorable economic data, suggests continued opportunities for investors, particularly in large-cap sectors. As long as Nifty remains above key support levels, market participants may benefit from a “Buy on Dips” strategy.
“The resilience of the Indian markets is providing additional strength to the rupee,” – Jateen Trivedi, LKP Securities.
