Nifty, Sensex Hit One-Month-High Post US Fed Meeting — Five Reasons Why Markets Are Up
The Nifty 50 has risen 1.19% to the day's high of 23,179.70, the highest level since Feb. 13.
The NSE Nifty 50 and BSE Sensex extended their gains for the fourth day after posting the best intraday gains in nearly two weeks on Tuesday. The indices rose tracking gains in Asia-Pacific stocks and overnight gains on Wall Street, after the US Federal Reserve kept interest rates unchanged and signalled two rate cuts this year.
So far during the day, the Nifty 50 has risen 1.19% to the day's high of 23,179.70, the highest level since Feb. 13. The Sensex was up 1.15% to the day's high of 76,320.40, the highest level since Feb. 19.
As of 1:30 p.m., the Nifty 50 was trading 1.13% higher at 23,166.15, and Sensex was trading 1.10% higher at 76,270.09.
Global Cues
The S&P 500 closed 1.1% higher and Nasdaq was up 1.4%. Dow Jones Industrial Average climbed 0.9%. The Magnificent 7—a gauge of top seven American tech companies, including Alphabet, Amazon, Apple, Meta Platforms, Tesla, Nvidia and Microsoft—surged 4%.
Australian and South Korean shares gained. The Kospi rose by 0.32% and S&P/ASX 200 by 1.16%. Futures for Hang Seng were marginally lower by 0.04%. Japanese markets are closed for a public holiday.
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US Fed Rate Cut
The US Federal Reserve maintained the benchmark interest rate in a target range of 4.25–4.50% during its latest policy meeting. The decision aligns with the Fed's December projections, indicating only two rate cuts this year amid increased economic uncertainty. The Fed remains prepared to adjust policy if risks that could impede its goals emerge, particularly as trade tensions rise under President Donald Trump's administration.
Fed Chair Jerome Powell noted that higher inflation expectations were partly due to tariffs imposed by Trump. The Fed has downgraded its economic growth outlook, while raising its inflation projection.
A lower interest rate could reduce borrowing costs and stimulate economic activity, further supporting the technology sector's growth. Additionally, the anticipated rate cuts are expected to enhance liquidity in the market, making it easier for companies to finance their operations and expansion plans.
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US Recession Fears Subside
Powell’s calibrated tone on recession risk — stating it was “not high” — soothed nerves among stock investors. The central bank’s move to trim growth assessments also added fuel to the bond rally, with traders and the Fed now aligned on the rate-cut outlook this year.
The Fed also said it will start shrinking its balance sheet at a slower pace starting next month, reducing the amount of bond holdings it lets roll off every month.
IT Stocks Advanced
IT stocks advanced on Thursday to the highest level in a week. Among the top gainers, Mphasis Ltd. saw the highest increase, with its share price rising by 3.66% to Rs 2,369.60. The stock later pared gains to trade 1.89% higher at Rs 2,329.10 apiece during afternoon trade.
LTIMindtree Ltd. followed closely, climbing 3.43% to Rs 4,515 before paring gains to trade 0.82% higher. Wipro stock was up 3.11% to Rs 273.95. Coforge Ltd. and Infosys Ltd. were other notable gainers, rising by 3.04% and 2.86%, respectively.
Broader Indices Rise
The Nifty Smallcap and Nifty Midcap also rose in the session. While the Nifty Smallcap 250 rose 1.50% intraday, Nifty Midcap 150 was up 0.87%. KEI International Ltd., Welspun Corp., Bharat Forget Ltd. and Thermax Ltd. led gains in the small and midcap index.
