The US Federal Reserve has reduced its key interest rate by 25 basis points (0.25%), sparking optimism across global markets. The move — aimed at sustaining economic growth amid global uncertainties — is expected to lift investor sentiment in India, with the Sensex and Nifty likely to open on a positive note today.

📈 Indian Markets Poised for a Strong Start

Early trends indicated that Gift Nifty futures were trading around 26,188 points at 7:45 am, suggesting a higher opening for the Nifty 50, which closed at 26,053.9 in the previous session. Both benchmark indices had gained nearly 0.5% on Wednesday and remain within 1% of their all-time highs recorded in September 2024.

Most Asian markets also opened with mild gains, mirroring Wall Street’s positive sentiment, though investors remain cautious after Fed Chair Jerome Powell signaled that further rate cuts this year are not guaranteed.

💵 What the Fed’s Rate Cut Means for Global Markets

The 25 bps rate cut, widely expected by economists, aims to maintain growth momentum while addressing global headwinds. Powell clarified that this might be the final rate reduction of 2025, cooling expectations of additional easing in December.

A lower US interest rate generally boosts emerging markets like India, as global investors seek higher returns. Analysts expect stronger foreign capital inflows, improved liquidity, and enhanced market sentiment on Dalal Street.

🏦 RBI May Follow With a Rate Cut in December

Market experts believe the Reserve Bank of India (RBI) could mirror the Fed’s move in its December policy review.
According to Vishal Goenka, Co-Founder of IndiaBonds.com, “The Fed’s decision gives the RBI room to ease policy. Given the previous dovish stance, a repo rate cut now looks increasingly likely.”

A potential cut in the repo rate could flatten the yield curve, making long-term government bonds more attractive and improving credit transmission across the banking sector.

🌏 Global Focus: Trump–Xi Meeting in Spotlight

Investors are also keeping an eye on the upcoming Trump–Xi summit, expected later today. A potential trade deal between the US and China could boost demand for commodities such as crude oil and metals — providing further support to Asian markets.

📊 FPI & Stock Watch

On Wednesday, foreign portfolio investors (FPIs) sold Indian equities worth ₹2,540 crore, while domestic institutional investors (DIIs) purchased shares worth ₹5,693 crore, offsetting the foreign outflows.

Among individual stocks, Larsen & Toubro (L&T) may remain in focus after the engineering giant reported strong Q2 results and revised its order growth guidance upward for FY26.

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🧾 Market Highlights

• US Fed cuts interest rates by 25 bps, signals possible end to 2025 easing cycle
• Gift Nifty at 26,188, indicating a strong start for Indian markets
• Sensex and Nifty expected to trade near record highs
• RBI repo rate cut seen likely in December policy
• FPIs net sellers, DIIs net buyers on Wednesday