Markets kicked off with a strong start on Thursday morning, as the benchmark Sensex surged 480.29 points (0.64 per cent) to 75,929.34 and Nifty gained 143.40 points (0.63 per cent) to reach 23,051.00 by 9.40 AM. The positive momentum was fueled by the US Federal Reserve’s decision to maintain interest rates at current levels while hinting at potential rate cuts later in the year.
Leading the early trading charge were technology stocks, with Wipro (2.60 per cent), Infosys (2.41 per cent), and TCS (1.82 per cent) emerging as top gainers on the NSE. Bharti Airtel (1.79 per cent) and Eicher Motors (1.57 per cent) also saw notable gains, while Bajaj Finance (-0.91 per cent), UltraCemCO (-0.49 per cent), Trent (-0.26 per cent), Adani Ports (-0.23 per cent), and JSW Steel (-0.18 per cent) were among the top losers.
“The domestic market is likely to continue its upswing, driven by strong global market momentum following the US Federal Reserve’s announcement of potential rate cuts later this year,” said Mr. Vikas Jain, Head of Research at Reliance Securities. He noted that the US 10-year bond yield dropped by 5 basis points and the US dollar index reached a 5-month low of 103 after the Fed’s decision.
The Federal Reserve chose to maintain its benchmark interest rate at 4.25 per cent-4.5 per cent while forecasting a slower US growth rate of 1.7 per cent and higher inflation at 2.8 per cent for the year. Fed Chair Jerome Powell emphasized that “policy can move either way depending on the evolving outlook,” citing uncertainties related to potential tariff policies under the Trump administration.
In the mid-cap and small-cap segments, indices displayed remarkable resilience, with both indices climbing over 2 per cent each yesterday, marking the Nifty Midcap 100 index’s highest single-session gain since June 5, 2024 after recent declines of about 35 per cent over the past few sessions.
Defense stocks continued to exhibit strength, with the defense index surging nearly 5 per cent yesterday. According to Vikas Jain, this rally is expected to persist due to increasing exports, robust government orders, and renewed sector interest driven by a possible India-US trade deal and Germany’s defense spending package.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted emerging market trends emphasizing the favoring of domestic consumption themes and the weakness in external-oriented IT. He pointed out that beaten-down themes like defense and shipping are gaining traction.
Technical analysts, while cautiously optimistic, indicated that the market’s short-term outlook remains positive despite temporary overbought conditions, suggesting potential range-bound activity in the coming days. Key support zones for Nifty were identified at 22800-22720, with resistance at 23000-23100.
In the commodities market, gold hit a new record high, trading above $3,055 an ounce (up 1.2 per cent), while Brent crude rose above $71 a barrel (up 1 per cent). Rahul Kalantri, VP Commodities at Mehta Equities, highlighted that “higher inflation and lower growth prospects may continue to support safe-haven buying for precious metals.”
For Bank Nifty, resistance near the 50,000 level was anticipated by Vikas Jain, with support at 48,500 followed by the 100-week average at 47,800 levels. He also cautioned that key technical indicators are currently overbought, suggesting a possible retracement.
Amid ongoing market volatility, market participants are advised to proceed with caution. Hardik Matalia, Derivative Analyst at Choice Broking, recommended traders to exercise caution, implement strict stop-loss strategies, and avoid carrying overnight positions.
