US Rate Cut Buoys Bourses

Mumbai: Benchmark equity indices Sensex and Nifty climbed to fresh record high levels on Thursday in line with firm global trends after the US Federal Reserve announced the first cut in policy rate in more than four years.

The 30-share BSE Sensex climbed 236.57 points or 0.29 per cent to settle at a all-time high of 83,184.80. During the day, it jumped 825.38 points or 0.99 per cent to scale a new all-time intra-day high of 83,773.61 but pared some of the gains at close. The NSE Nifty gained 38.25 points or 0.15 per cent to 25,415.80. During the day, it surged 234.4 points or 0.92 per cent to hit a fresh intra-day record peak of 25,611.95.

“In the Indian market, Nifty has climbed 2.1 per cent over the past 10 days in anticipation of the rate cut, although market activity remained relatively flat today, with early excitement tapering off by the afternoon. This suggests that markets may have already priced in the rate cut and are looking ahead to other clues. Additionally, crude oil prices are trading at 52-week lows, and essential metals like iron ore and steel are hovering near multi-year lows—clear indicators of a slowing global economy. Looking forward, markets may shift their focus to how these rate cuts affect corporate earnings and broader economic health, especially if global demand continues to weaken,” said Amit Golia, Group CEO, MarketsMojo.

The BSE smallcap gauge declined 1.06 per cent and midcap index dipped 0.53 per cent.

“The benchmark indices concluded with a minor gain after hitting record highs post the US Fed’s more than expected interest rates cut of 50 bps and hinted for further reduction. The substantial rate cut sparked concerns over global slowdown, resulting in profit-booking in mid & small cap trading at premium valuation,” said Vinod Nair, head (research), Geojit Financial Services.

Among the indices, consumer durables climbed (0.64%). Realty (0.47%), bankex (0.46%), consumer discretionary (0.34%) and auto (0.32%) were among the gainers.

“The 50 bps rate cut is a bold stance by the US Fed to revitalise their subdued economy, which will in turn open the door for other global central banks, including RBI to kick-start the softer interest rate regime,” said Vijay Bharadia, founder, Wallfort Financial Services Ltd. Telecommunication tumbled 3.89 per cent, oil & gas (1.81 per cent), industrials (1.56 per cent), services (1.22 per cent), teck (0.60 per cent) and IT (0.48 per cent).

From the 30 Sensex firms, NTPC, Nestle, Titan, Kotak Mahindra Bank, Maruti, Hindustan Unilever, Bharti Airtel and HDFC Bank were the biggest gainers. HCL Technologies, Tata Consultancy Services, Adani Ports, Larsen & Toubro, JSW Steel, State Bank of India, Tech Mahindra and Bajaj Finance were among the laggards from the pack.

Foreign Institutional Investors (FIIs) bought equities worth Rs1,153.69 crore on Wednesday, according to exchange data. Global oil benchmark Brent crude jumped 1.21 per cent to $74.54 a barrel.