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US Fed Rate Cut: Amid heightened volatility, analysts recommend monitoring key help ranges and exercising warning.
Global markets remained below stress, contributing to the weak spot in Indian equities. (Representative picture)
Fed Rate Cut Impact On Indian Stock Market: Indian fairness markets witnessed a pointy sell-off on Thursday morning, with benchmark indices tumbling considerably in early commerce. Global markets, together with India, noticed sharp sell-offs because the Fed Chief’s warning about slower-than-expected charge cuts in 2025 spooked traders.
The BSE Sensex dropped 1,162.12 factors, or 1.45%, to 79,020.08, whereas the NSE Nifty declined by 328.55 factors, or 1.36%, to 23,870.30.
The US Federal Reserve introduced one other 25 foundation level discount in key rates of interest on December 18, bringing the vary to 4.25–4.50%.
Addressing reporters after the coverage announcement, Fed Chair Jerome Powell highlighted the resilience of the US economic system. “The US stays robust general. The unemployment charge is projected at 4.2% this 12 months and 4.3% over the following few years. Inflation has eased considerably over the previous two years however stays barely above our 2% longer-run goal,” Powell said.
This marks the third consecutive charge lower by the FOMC in as many months. The cycle started in September with a 50 foundation level discount, adopted by a 25 foundation level lower in November. Prior to this, the Fed had maintained charges unchanged for practically 4 years earlier than initiating the present easing cycle.
The newest transfer displays the Fed’s ongoing efforts to steadiness financial development with inflation management. Analysts will carefully monitor the influence of this resolution on world markets and home financial indicators.
How US Fed Rates Affect India’s Stock Market
Gift Nifty Suggests Gap-Down Opening
Santosh Meena, Head of Research at Swastika Investmart Ltd., famous that Gift Nifty alerts a continuation of the three-day dropping streak with a gap-down opening. “The first main help for Nifty lies on the December collection low of 23,923, whereas the 200-DMA at 23,800 will act as a vital help degree,” he mentioned.
He highlighted the extraordinarily oversold market circumstances, with the Put-Call Ratio (PCR) at 0.55. “This means that Nifty may discover some footing within the 23,923–23,800 zone, doubtlessly resulting in sideways motion. Overall, the market stays range-bound, with a sector-specific and stock-specific focus,” Meena added.
Global Market Sell-Off and Bond Yields Spike
Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, emphasised that the Fed’s cautious outlook has rattled world markets. “Though the US Fed lower rates of interest by 25 foundation factors, Fed Chair Jerome Powell’s warning of slower charge cuts subsequent 12 months triggered a spike in US 10-year bond yields above 4.5%. The Dow Jones marked its tenth consecutive loss, whereas the S&P 500 nosedived by 3% in a single session,” Sheth defined.
Sheth cautioned that if bond yields proceed their upward trajectory, US markets may see additional corrections as 2025 approaches. “Indian markets gained’t have a lot of an possibility however to comply with world cues,” she mentioned, including that inflation stays a key concern globally regardless of easing barely because of the excessive base impact.
Investor Outlook
Amid heightened volatility, analysts recommend monitoring key help ranges and exercising warning. Sectoral and stock-specific methods are anticipated to dominate buying and selling patterns as markets await readability on world and home financial cues.
