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Fed Rate Cut Lifts Indian Markets, Trade Deal Looms
12 Dec
Summary
- Indian indices rose about 0.5% after the US Federal Reserve cut rates by 25 basis points.
- Analysts foresee trade deal delays potentially pushing negotiations into 2026.
- Foreign investors sold shares worth ₹2,021 crore on Thursday, capping market gains.
India's equity markets experienced a modest uptick on Thursday, with major indices climbing about 0.5%. This recovery followed the US Federal Reserve's decision to cut its key interest rates by 25 basis points, providing a temporary positive cue for investors.
However, market sentiment remains cautious due to potential delays in finalizing the crucial India-US trade deal. Analysts suggest that if the agreement isn't concluded soon, upcoming holidays could postpone negotiations into 2026, potentially dampening further buying interest and limiting significant directional moves in the near term.
Adding to the market's pressure, foreign portfolio investors have been net sellers, offloading shares worth over ₹18,000 crore in December alone. While domestic institutions provided substantial buying support, the consistent selling by foreign investors is capping any significant upside, keeping the Nifty within a projected range of 25,600 to 26,300.
