The benchmark indices, Sensex and Nifty 50, are set to extend their rally and open higher on Thursday after the US Federal Reserve delivered the widely anticipated 25-bps rate cut, despite mixed overnight global market cues.

Asian markets traded mostly higher, while US equities closed mixed overnight after the Fed’s decision and Chair Jerome Powell flagged concerns about a slowing US labour market and rising inflation.

However, on Wednesday, Indian equities ended with decent gains as sentiment strengthened when India and the US resumed trade talks.

Domestic Market Recap

On Wednesday, Indian indices closed in the green:

• Sensex surged by 313.02 points (0.38%) to close at 82,693.71
• Nifty 50 moved up by 91.15 points (0.36%) to settle at 25,330.25

Gift Nifty

Gift Nifty was trading near 25,497, around 74 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.

Wall Street Performance

The US equities closed mixed after the Federal Reserve delivered the expected 25-bps rate cut.

• The Dow Jones Industrial Average gained by 260.42 points (0.57%) to close at 46,018.32.
• S&P 500 down by 6.41 points (0.1%), ending at 6,600.35.
• The Nasdaq Composite was trading lower by 72.63 points (0.32%), finishing at 22,261.33.

Gold Prices

Gold prices fell further on Thursday as the dollar strengthened after the expected US Fed rate cut and cautious comments on future policy easing.

• Spot gold was trading 0.2% lower at $3,653.54/oz
• US gold futures were trading 0.8% lower at $3,688.10

Crude Oil Prices

Crude oil prices held steady after the US central bank delivered the widely anticipated interest rate cut.

• Brent crude slumped by 0.12% to $67.87/barrel
• US West Texas Intermediate (WTI) crude was trading 0.16% lower at $63.95/barrel

Overnight Major Global Events Driving Sentiment

1. China Interest Rates: The People’s Bank of China (PBOC) kept the borrowing cost of its seven-day reverse repurchase agreements unchanged at 1.40%, Reuters reported. The central bank injected 487 billion yuan ($68.56 billion) through open market operations while maintaining the same rate as in the previous operation.
2. US Federal Reserve Policy: The US Federal Reserve cut the benchmark interest rate by 25 basis points, citing rising stress in the labour market. The FOMC voted 11:1 to lower the federal funds rate to a 4%–4.25% range and projected two more quarter-point cuts later this year.

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