The Indian stock market is poised for a positive start on Thursday, as both the Sensex and Nifty 50 indices are expected to open higher. This optimistic outlook comes on the heels of a surge in global markets following the U.S. Federal Reserve’s recent monetary policy announcement. With Asian markets also showing gains, investors are eager to see how these developments will influence trading in India.

Global Market Rally Boosts Indian Indices

On Wednesday, Indian equities enjoyed their third consecutive day of gains. The Nifty 50 closed above the significant 22,900 mark, while the Sensex rose by 147.79 points (0.20%), finishing at 75,449.05. The Nifty 50 climbed 73.30 points (0.32%), ending at 22,907.60.

Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted, “While some market consolidation is probable, the overall sentiment remains optimistic, suggesting a ‘buy on dips’ strategy. Key sectors such as banking, financials, metals, and energy are leading the charge, and traders should navigate the market with caution."

Key Global Influences on Indian Market

• Asian Markets: Following a positive trend in U.S. markets, Asian indices are also on the rise.

  • South Korea’s Kospi increased by 0.64%.
  • Kosdaq also saw a gain of 0.55%.
  • Japanese markets are closed for a holiday, while Hong Kong’s Hang Seng index futures suggest a lukewarm opening.
• Gift Nifty: Trading at approximately 23,062, Gift Nifty indicates a potential gap-up opening for Indian indices, suggesting a bullish start.

U.S. Market Performance

The U.S. stock market witnessed a significant rally on Wednesday following the Fed’s decision to maintain interest rates.

• The Dow Jones Industrial Average surged by 383.32 points (0.92%) to reach 41,964.63.
• The S&P 500 rose 60.63 points (1.08%) to 5,675.29.
• Notably, the Nasdaq Composite gained 246.67 points (1.41%), closing at 17,750.79.

Major tech stocks also saw impressive gains:

• Tesla shares jumped 4.68%.
• Nvidia climbed by 1.81%.
• Apple advanced 1.20%, and Boeing shares soared by 6.8%.

Insights from the U.S. Federal Reserve

The U.S. Federal Reserve decided to keep its benchmark interest rate steady in the range of 4.25% – 4.50%, with indications of potential cuts later in the year. The Fed has raised its inflation projections for 2025 while revising down its economic growth forecast, signaling a cautious approach moving forward.

China’s Lending Rates and Gold Prices

In China, the People’s Bank of China has maintained its benchmark lending rates for the fifth consecutive month, aligning with market expectations. The one-year Loan Prime Rate remains at 3.1%, while the five-year rate holds steady at 3.6%.

In commodity markets, gold prices reached new heights following the Fed’s announcement, with spot gold rising to $3,052.92 per ounce, just shy of the record of $3,055.31.

Treasury Yields and Currency Movements

U.S. Treasury yields experienced a decline as expectations grew for future rate cuts. The yield on 10-year notes dropped by 3.3 basis points to 4.249%, and the 30-year bond yield fell by 2 basis points to 4.5593%.

The U.S. dollar also adjusted slightly after the Fed’s decision, with the dollar index rising 0.18% to 103.49. Against the euro, the dollar weakened by 0.39%, trading at $1.09.

Crude Oil Prices on the Rise

Crude oil prices climbed following the Fed’s announcement, bolstered by positive fuel consumption data. Brent crude is now priced at $71.10 per barrel, while U.S. West Texas Intermediate (WTI) futures rose to $67.31.

In conclusion, the Indian stock market is set for a bright opening, influenced by positive global cues, particularly from the U.S. and Asian markets. Investors are encouraged to stay informed and strategic as the market continues to evolve.