Sensex Jumps 595 Points, Nifty 50 Settles Above 25,200 Amid India-US Trade Talks, US Fed Rate Cut Bets

Benchmark indices bounced back on September 16 after a brief one-day pause in the previous session. The gains were led by expectations of a 25 basis points (bps) rate cut from the US Federal Reserve at its policy meet, which started today. Renewed India-US trade talks also supported investor optimism.

The BSE Sensex jumped 594.95 points, or 0.73 per cent to end at 82,380.69. Likewise, the NSE Nifty 50 climbed 169.90 points, or 0.68 per cent to close at 25,239.10.

The broader markets continued to outperform benchmarks. The Nifty Smallcap 100 and Nifty Midcap 100 indices closed higher by 0.95 per cent and 0.54 per cent, both extending gains for the eighth consecutive day. The Nifty 500 index, which captures more than 92 per cent of the free-float market cap of all NSE-listed stocks, surged 0.66 per cent, continuing with its 12-day winning streak. The Nifty Microcap 250 index, tracking the 250 most liquid and valuable stocks beyond Nifty 500 constituents, also advanced 0.55 per cent.

Auto, Realty Emerge Top Sectoral Gainers, FMCG Lags

During the session, Nifty Auto and Nifty Realty emerged as the biggest sectoral gainers, rising 1.44 per cent and 1.07 per cent, respectively. Nifty Energy, Nifty IT and Nifty Metal were other top gainers, rising between 0.80 per cent and 1 per cent.

Barring FMCG, all other major sectoral indices ended in green. Nifty FMCG closed 0.27 per cent lower.

Nifty Bank, tracking 12 most liquid and valuable banking stocks, surged 0.47 per cent to close at 55,147.60.

Nifty 50 Top Gainer & Losers

In the Nifty 50 index, Kotak Mahindra Bank emerged as the top gainer, rising 2.67 per cent, followed by Larsen & Toubro at 2.34 per cent, Mahindra & Mahindra at 2.31 per cent, Eicher Motors at 2.21 per cent, and Maruti Suzuki at 2.14 per cent. Bharti Airtel, Grasim Industries, Tata Steel, Axis Bank, JSW Steel, ONGC, UltraTech Cement, Wipro, Eternal (formerly Zomato), NTPC, Tata Consultancy Services (TCS), HCL Technologies, and Bharat Electronics were other top gainers.

On the downside, Shriram Finance, Asian Paints, Nestle India, Tata Consumer Products, HDFC Life Insurance, Bajaj Finance, SBI Life Insurance, and HDFC Bank saw modest losses, falling up to 1 per cent.

Crude Oil Price Today

Crude oil prices edged higher for the third consecutive day today. At 4:45 PM, Brent crude November futures traded at $67.64 per barrel, up by 0.30 per cent. The West Texas Intermediate (WTI) crude oil October futures, too, advanced 0.44 per cent to trade at $63.58, around the same time. 

Gold Prices Today

Gold prices surged to hit new record highs today ahead of the US Federal Reserve meeting, where traders are pricing in a 25-bps rate cut.

October Gold futures on the Multi-Commodity Exchange (MCX) rose 0.30 per cent to trade at Rs 1,10,515 per 10 grams. During the session, the contract hit a fresh all-time high of Rs 1,10,644 per 10 grams.

December Gold futures on COMEX gained 0.33 per cent to trade at $3,731.30 per ounce. During the session, the contract touched a fresh record high of $3,734.80 per ounce.

Market Outlook

US Fed rate Cut: The US Federal Reserve’s rate-setting panel Federal Open Market Committee (FOMC) started its meeting today, and will conclude on September 17. Afterwards, Fed Chair Jerome Powell will announce FOMC’s decision on interest rates, which the market is already widely expecting to cut rates by 25 bps. The focus will be on further trajectory of rates.

If the FOMC decides to cut rates further, it is likely to lower yields on US government bonds, making them seem less attractive to investors. This in turn, is expected to prompt foreign portfolio investors (FPIs) to seek higher returns in emerging markets like India through equities and debt.

Renewed India-US Trade Talks: Meanwhile, India and the US have begun talks on a proposed bilateral trade agreement to address issues arising from steep tariffs that have created uncertainties for Indian exporters.

Brendan Lynch, Assistant US Trade Representative for South and Central Asia, is leading the US team, while Rajesh Agrawal, Special Secretary in the Department of Commerce, heads the Indian delegation.

Lynch arrived in India late on September 15 for a one-day meeting on September 16. This is the first visit by a senior US trade official since the US imposed a 25 per cent tariff and an additional 25 per cent penalty on Indian goods for buying Russian crude oil.