Sensex, Nifty eye 3rd day of gains as US Fed approves 25 bps rate cut, sees 2 more in 2025

Indian markets set to ride Fed’s policy pivot

Indian benchmark indices Sensex and Nifty look set to carry forward their gains for the third consecutive session on September 18, buoyed by the US Federal Reserve’s decision to embark on its first rate cut cycle of the year. The central bank lowered its benchmark range to 4 to 4.25 percent and hinted at the possibility of 2 more rate cuts in 2025, followed by 1 in 2026.

As of 7:15 am, the GIFT Nifty was trading at around 25,494, up by 80 points or 0.3 percent, signaling a positive start for domestic equities.

Fed pivots focus from inflation to jobs

This marks the Fed’s first rate cut since December, after holding rates steady through the year while assessing the impact of tariffs, stricter immigration policies, and other Trump administration measures on inflation and growth.

The central bank’s stance has now shifted: inflation, though still modestly above its two percent target, is no longer the main concern. Instead, jobs are in focus, as hiring momentum has slowed sharply and unemployment has begun to edge higher.

“Downside risks to employment have risen,” the Fed stated following its two-day policy meeting.

Fed officials signalled expectations of two additional cuts this year and one in 2026, falling short of investor hopes. Ahead of the meeting, market participants had pencilled in 3 rate cuts across 2025 and 2026.

Ponmudi R, CEO of Enrich Money, described the policy move as a “pivotal shift,” noting that lower borrowing costs could revive global risk appetite.

“A softer dollar also boosts prospects of stronger foreign inflows into India. Together with consistent domestic institutional support and firm technical structures, this strengthens the case for continued market upside—so long as global cues remain favorable,” he said.

Technical view: Key levels on Nifty

On the technical front, Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth, flagged 25,400 as immediate resistance. “A breakout above this zone could open doors for the 25,500–25,600 band,” he said. On the downside, support stands at 25,250, followed by 25,100. For Thursday’s session, the trading range is expected between 25,470 on the higher side and 25,160 on the lower side if 25,250 fails to hold.

Yesterday, Nifty climbed to a fresh three-month high at 25,330, marking advances in eleven of the past thirteen sessions and recovering more than 900 points from the swing low of 24,404 recorded on August 29, 2025.

Momentum remained firmly in favour of the bulls, with broader markets staying active and sector-specific themes providing additional tailwinds. Banking stocks, particularly PSU banks, led the charge with robust buying interest, further strengthening overall sentiment.

Global cues mixed

On the global front, US stock futures ticked higher in early trade as investors continued to digest the Fed’s decision. Overnight, the major indices closed mixed after a volatile session. The Dow Jones Industrial Average held onto a 260-point gain, while the S&P 500 slipped 0.1 percent and the Nasdaq Composite declined 0.3 percent.

Asian markets opened on a mixed note this morning. Japan’s Nikkei 225 surged nearly 0.6 percent to a record high, South Korea’s Kospi rose 0.43 percent, while Australia’s ASX/S&P 200 slipped 0.57 percent.

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