Sensex climbs 320 pts, Nifty tops 25,400 after US Fed rate cut; is more upside ahead?

Domestic equity benchmarks stretched their winning run to a third straight day on Thursday, as Sensex and Nifty ended higher. The gains rode on the back of the US Federal Reserve’s 25-basis-point rate cut, which lifted global mood, while signs of headway in India-US trade talks kept investor confidence boosted.

At the closing bell, the Sensex rose 0.39 per cent or 320.25 points, to close at 83,013.96. The Nifty50 added 93.35 points, or 0.37 per cent, to settle at 25,423.60. 

Rupak De, Senior Technical Analyst at LKP Securities, said the 50-pack index remained volatile after opening with a gap-up, following the dovish stance from the US Federal Reserve.

“The short-term trend is likely to stay positive as the index is comfortably trading above its critical moving average. The daily RSI is in a bullish crossover and rising above the previous swing high, indicating strengthening momentum,” De said.

Eternal emerged as the top gainer on the Sensex, climbing 2.89 per cent to Rs 337.70. Sun Pharma advanced 1.65 per cent, Infosys added 1.25 per cent, HDFC Bank rose 1.13 per cent, Power Grid gained 0.91 per cent, and HCL Technologies was up 0.84 per cent.

Five stocks namely, HDFC Bank, Infosys, Eternal, ITC and ICICI Bank contributed heavily to the Sensex’s rise. 

Among the sectoral indices, the BSE IT index climbed 0.81 per cent to settle at 36,077.55, while the BSE Healthcare index was up 0.87 per cent to close at 45,130.04.

Overall, out of the 4,342 active stocks traded on the BSE, 2,191 ended with gains, while 1,985 settled lower and 166 remained unchanged. As many as 170 stocks scaled their 52-week highs during the session. A total of 48 others hit their 52-week lows. The session also saw 290 stocks locked at their respective upper circuits and 140 others at lower circuits.

Within the BSE Sensex pack, Eternal and Maruti Suzuki touched fresh 52-week highs at Rs 338.05 and Rs 15,974.75, respectively.

Rajesh Palviya, Senior Vice President – Research at Axis Securities, said the US Federal Reserve’s 25-basis-point rate cut reflects a cautious stance aimed at supporting the labour market amid rising employment risks. “The dovish stance is expected to lower borrowing costs and encourage consumer spending in the U.S. markets, which could lead to gains in equities, bonds, and real estate,” he said. 

“However, some volatility may persist due to internal divisions. In India, the Fed's actions could attract foreign capital, strengthening the rupee and benefiting stock indices like the BSE Sensex and NSE Nifty,” Palviya added.

Umesh Sharma, CIO–Debt at The Wealth Company Mutual Fund, on the Fed’s 25-basis-point rate cut said, “The decision reflects the Fed’s challenge of balancing its dual mandate: inflation remains above target and is expected to return to the 2 per cent objective only by 2028, while labor market conditions are softening with unemployment inching higher.”

He added that in his post-policy remarks, the Fed Chair described the move as “risk management,” stressing that risks to the employment mandate currently outweigh those on inflation. The vote was nearly unanimous, with just one member advocating a larger cut.