Nifty, Sensex may rise tracking global markets as investors cheer Fed rate cut plans

Trends in the GIFT Nifty indicate a strong start for the broader index in India, with a gain of 146 points or 0.67 percent.

Indian markets are likely to rise on March 21, tracking gains in the US and Asian markets after the Federal Reserve kept the borrowing costs unchanged and stoked expectations of as many as three rate cuts this year.

Trends in the GIFT Nifty indicate a strong start for the broader index in India, with a gain of 146 points or 0.67 percent. The Nifty futures were trading around the 22,071 level.

Fed chair Jerome Powell reiterated that policymakers still intend to cut rates before the end of this year, assuming sustained economic growth.

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“We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said.

Investors cheered the Fed commentary pushing all the major Wall Street indices to close at fresh record highs.

The Dow Jones Industrial Average rose 401.37 points, or 1.03 percent, to 39,512.13, the S&P 500 gained 46.11 points, or 0.89 percent, to 5,224.62 and the Nasdaq Composite gained 202.62 points, or 1.25 percent, to 16,369.41.

Asian markets also surged, tracking the mother market's gains. Japan’s Nikkei 225 surged 1.57 percent, hitting a new all-time high, while the Topix also set a new record and rose 1.41 percent.

South Korea’s Kospi climbed 1.52 percent to hit its highest level since April 2022, while the small-cap Kosdaq was up 1.48 percent.

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DXY fell after the fed policy and the US yield curve steepened. "A combination of these two is good for Indian equities, especially high beta cyclicals. At this time, the biggest risk to Indian markets is rising oil prices which will ironically get support from falling US dollar," said Veteran fund manager and co-founder of Pinetree Macro, Ritesh Jain.

Going forward, inflation and unemployment data from the US should be watched keenly, he added.

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