Markets opened slightly higher on Thursday following a 25 basis points rate cut from the US Federal Reserve, bringing the policy rate down to 3.50–3.75 percent. However, early gains faded due to concerns over rupee weakness and trade issues affecting investor confidence. The Sensex, which closed at 84,391.27 on Wednesday, opened at 84,456.75 and was trading at 84,559.15 at 10:16 IST, reflecting an increase of 167.88 points or 0.20 percent. The Nifty index moved from its previous close of 25,758 to 25,809.30, up by 51.30 points or 0.20 percent.
“The Fed’s quarter-point cut is its third reduction this year and brings the policy rate to the lowest level in over three years,” noted Rajesh Palviya, Senior Vice President of Research at Axis Securities. He explained that this action indicates that concerns about slowing growth and labor market softness are now outpacing previous worries about persistent inflation.
The Federal Reserve’s decision, while anticipated, was made amid a divided committee, with two members favoring no cut and one advocating for a deeper 50 basis points reduction. Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth tech firm, stated, “Inflation remains stubborn at 2.8 percent, unemployment has risen to 4.4 percent, and the Fed is now focused on fostering growth while avoiding another inflation spike.”
US markets experienced a rally post-announcement, with the Dow rising over 1 percent and the S&P 500 increasing by 0.68 percent. Asian markets opened on a positive note, bolstered by the US rebound and improving manufacturing data from China. However, the rise in Indian markets was short-lived as ongoing rupee weakness raised caution among investors. Ponmudi expressed concerns about delays in meaningful progress in India-US trade negotiations, which contributed to profit-booking in top stocks.
Among Nifty50 stocks, Eternal led the gainers, climbing 2.28 percent to ₹289.70, followed closely by Tata Steel, which gained 1.63 percent to ₹164.87. Shriram Finance advanced 1.30 percent to ₹848.10, and Kotak Mahindra Bank increased by 1.27 percent to ₹2,156.60. Maruti Suzuki saw a rise of 1.03 percent to ₹16,184.
On the downside, Trent fell 1.08 percent to ₹3,975, while Titan declined by 1.00 percent to ₹3,807.20. Asian Paints dropped 0.81 percent to ₹2,781.90, HDFC Life slid 0.80 percent to ₹764.90, and SBI Life was down 0.55 percent to ₹2,003.40.
From a technical standpoint, Shrikant Chouhan, Head of Equity Research at Kotak Securities, indicated that the market is forming lower highs on daily and intraday charts, suggesting potential further declines. He advised day traders to monitor the support zone at 25,750/84,400, stating, “As long as the market remains above this level, the pullback is likely to continue.”
Palviya emphasized that the more accommodative Fed and maturing global rate cycle help alleviate concerns surrounding dollar strength and capital outflows, creating a positive environment for the rupee and domestic liquidity. He predicted sustained buying interest in financials, consumption, and select rate-sensitive sectors.
Devarsh Vakil, Head of Prime Research at HDFC Securities, remarked that the markets interpreted the Fed’s action as dovish but not indicative of an aggressive easing cycle, moderating expectations for risk assets and rate-sensitive sectors. Projections indicated that policymakers expect just one additional quarter-point reduction in 2026.
Ponmudi explained that the Nifty continues to trade above the rising channel support drawn from the lows of October, with the 20-EMA near 25,955 and the 50-EMA near 25,729 providing dynamic support. “A move back above 25,860 will signify intraday strength, paving the way toward 25,950 and the psychological milestone of 26,000,” he added.
Published on December 11, 2025.
