Historically, the Indian stock market has shown a positive response following rate cuts by the U.S. Federal Reserve. Over the past three decades, whenever the Fed has lowered interest rates, Indian indices, particularly the Nifty 50, have typically seen an upward movement in the range of 1-1.5%. This trend is driven by the expectation that lower U.S. rates make emerging markets, like India, more attractive to global investors.
As of today, signs of optimism are already visible, with SGX Nifty trading about 100 points higher than its previous close. This indicates a likely positive opening for the Indian markets, reinforcing expectations of an upward movement. Market participants are anticipating a continuation of this historical trend, which could push the Nifty further into positive territory.
A rate cut by the Fed often eases financial conditions globally, boosting liquidity flows into riskier assets, including emerging market equities. Therefore, investors are keenly watching how this plays out in today’s market session.