Nifty and Sensex Surge After US Federal Reserve Cuts Interest Rates
On Friday, the Nifty 50 and Sensex opened strong following a global market surge after the US Federal Reserve decided to cut interest rates. The Nifty 50 index started at 25,525.95 points, gaining 110.15 points or 0.43%, while the Sensex opened at 83,603.04 points, up by 418.24 points or 0.50%.
Experts noted that Foreign Institutional Investors (FIIs) have changed their positions in Indian markets due to concerns about Indian stocks being overvalued. However, strong support from domestic investors continues. Ajay Bagga, a Banking and Market Expert, said, “US markets bounced back strongly, making the 39th all-time high on the S&P 500 for the year. Asian markets are largely positive as well. India saw a surprise negative number for FII flows on Wednesday. Most foreign brokerages are pointing to India’s valuations as a tactical issue, with MSCI India Index at 24 times one year forward PE. Domestic flows continue to be strong, but the FII selling if it continues, will make it tough for the Indian markets to rally sustainably.”
Among the sectoral indices on the NSE, Nifty Metal led the gains in the opening session with a rise of 0.96%. Other sectoral indices, including Nifty Bank, Nifty FMCG, and Nifty Auto, also posted gains. The top gainers in early trading included Tata Steel, JSW Steel, and Mahindra & Mahindra, while the top losers were Tata Motors, LTIM, and Dr Reddy’s shares.
Asian markets also followed the rally sparked by the Fed rate cut. Japan’s Nikkei 225 surged more than 2%, Hong Kong’s Hang Seng gained 1.65%, and South Korea’s KOSPI index was up by 0.78% at the time of filing this report. In the US markets on Thursday, stocks jumped, with the Dow Jones Industrial Average and S&P 500 hitting new all-time highs. Investors responded positively to the Federal Reserve’s decision to lower interest rates by half a percentage point on Wednesday.
Doubts Revealed
Nifty -: Nifty is a stock market index in India. It shows how the top 50 companies listed on the National Stock Exchange (NSE) are performing.
Sensex -: Sensex is another stock market index in India. It tracks the performance of the top 30 companies listed on the Bombay Stock Exchange (BSE).
US Federal Reserve -: The US Federal Reserve is like the central bank of the United States. It helps control the country’s money supply and interest rates.
Interest Rates -: Interest rates are the cost of borrowing money. When the US Federal Reserve cuts interest rates, it becomes cheaper to borrow money.
Foreign Institutional Investors -: Foreign Institutional Investors (FIIs) are people or companies from other countries who invest in India’s stock markets.
Domestic Investors -: Domestic investors are people or companies from India who invest in the Indian stock markets.
Sectoral Indices -: Sectoral indices are groups of stocks from the same industry. For example, Nifty Metal includes companies from the metal industry.
Nikkei 225 -: Nikkei 225 is a stock market index in Japan. It shows how the top 225 companies listed on the Tokyo Stock Exchange are performing.
Hang Seng -: Hang Seng is a stock market index in Hong Kong. It tracks the performance of the largest companies listed on the Hong Kong Stock Exchange.
