The Indian stock market witnessed a sharp upward momentum this week, as the Sensex crossed the 84,000 mark for the first time, and Nifty hit a new all-time high, thanks to a surprising 50 basis points rate cut by the US Federal Reserve. The US Fed’s decision has buoyed global markets, easing concerns of a potential economic slowdown, as softer-than-expected jobless claims indicated a “soft landing” for the US economy at the start of the rate-cut cycle.
Nifty’s Trajectory and Technical Levels
With the ongoing bullish momentum, experts predict that Nifty may reach 25,900 to 26,000 levels. However, 26,000 is expected to act as an immediate resistance, and on the downside, 25,500 will provide support. According to Hrishikesh Yedve of Asit C Mehta Investment Intermediates, as long as Nifty stays above 25,600, traders should adopt a “Buy on Dips” strategy, with additional support seen around the 25,300 mark.
Renewed Market Interest in Key Sectors
Following the Fed’s rate cut, Indian markets have seen renewed buying interest, especially in sectors like consumption, auto, finance, and real estate, which had previously experienced selling pressure. Large-cap stocks have garnered more attention as investors rotate into safer, more stable areas of the market. Export-oriented sectors such as pharmaceuticals and IT are being approached with caution due to the depreciation of the US dollar, which has impacted their near-term outlook.
Rupee and Gold Performance
The rupee traded positively, strengthening to 83.53, supported by the weakening dollar index, which hit 52-week lows. Analysts noted key support levels for the rupee at 83.60-83.65, with resistance seen between 83.40 and 83.30. Additionally, gold prices surged, reaching an all-time high on Comex, crossing $2,610 per ounce. Analysts attribute this to strong liquidity inflows following the Fed’s rate cut, and they expect further upward momentum for gold, especially with more rate cuts anticipated in the near future.
Sectoral Outlook
The market’s resilience has given strength to the rupee, and investors are showing increased interest in large-cap stocks, especially in sectors like consumption, staples, finance, and real estate. However, export-focused industries such as pharmaceuticals and IT are facing caution due to dollar depreciation. Gold, meanwhile, has hit record highs, driven by liquidity inflows and expectations of further rate cuts.
In summary, the recent US Fed rate cut has energized the Indian stock market, with benchmark indices scaling new heights. As market sentiment remains optimistic, key sectors are seeing inflows, while the rupee and gold also reflect positive trends.
