The equity benchmark indices advanced nearly 1 percent on Wednesday, tracking positive cues from global markets amid expectations of a US Federal Reserve rate cut later this month.
The Sensex jumped 575.45 points or 0.7 percent to settle at 82,605.43. During the day, it surged 697.04 points or 0.84 percent to 82,727.02. The Nifty climbed 178.05 points or 0.71 percent to 25,323.55.
Nestle India, Jio Financial Services, Asian Paints, HDFC Life Insurance Company and Bajaj Finserv were among key gainers, rising up to 3 percent.
Key factors behind market rise
1) Fed rate cut hopes lift sentiment: Investor sentiment improved after US Federal Reserve Chair Jerome Powell said the labour market remained weak, while the economy appeared on a firmer footing. He noted that the inflation outlook remained unchanged from September, when the Fed last reduced rates by 25 basis points.
Powell’s comments raised expectations of another rate cut this month, which could make emerging markets like India more attractive to foreign investors as lower US rates typically reduce dollar and Treasury yields.
"Fed Chair Jerome Powell warned that the sharp slowdown in hiring is increasingly threatening the US economy, hinting at the possibility of two more rate cuts this year," Jigar Trivedi, Senior Research Analyst at Reliance Securities told PTI.
2) Volatility eases: The India VIX, a measure of market volatility, declined nearly 4 percent to 10.76. A fall in the index indicates reduced uncertainty, often encouraging investors to take on more risk in equities.
3) Rupee recovers: The rupee strengthened 88 paise from its all-time closing low to 87.93 against the US dollar in early trade, tracking a weaker dollar index after dovish signals from the Fed. Traders said the recovery was also supported by falling crude prices and possible intervention by the Reserve Bank of India. A stronger rupee typically boosts investor confidence and may attract foreign inflows.
4) Crude oil slips: Global benchmark Brent crude declined 0.19 percent to USD 62.27 a barrel. Oil prices extended losses after the International Energy Agency warned of a potential supply surplus in 2026 amid weak demand and rising output. Lower crude prices are generally positive for India, which imports most of its oil.
5) Firm global cues: Asian markets traded higher, with South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng indices all in the green. Wall Street futures were also positive, suggesting a firm start for US markets later in the day.
6) Hopes of early India-US trade deal: Prospects for an early India–US trade agreement have grown as tensions between the United States and China intensified this week. US Treasury Secretary Scott Bessent accused President Xi Jinping’s government of engaging in “provocative” economic actions following Beijing’s decision to tighten export restrictions on rare earth minerals. Bessent noted that Washington has already started working closely with allies—including India, European nations, and other Asian democracies—to craft a coordinated response to China’s latest measures.
Analysts’ view
Anand James, Chief Market Strategist at Geojit Financial Services, said that though the 20-day simple moving average (SMA) helped limit Tuesday’s fall, the broader bias remains cautious.
"While we acknowledge the prevailing bearish pattern, we will look for a move beyond 25,230 to turn positive. A breakout above 25,330 could open the way for further upside,” James said.
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