Markets opened marginally higher on Thursday after the delivered a 25 basis points rate cut, lowering the policy rate to 3.50–3.75 per cent, but early gains faded as rupee weakness and trade concerns weighed on investor sentiment. The Sensex, which closed at 84,391.27 on Wednesday, opened at 84,456.75 and was trading at 84,559.15 at 10:16 IST, up 167.88 points or 0.20 per cent. The Nifty moved from its previous close of 25,758 to 25,809.30, gaining 51.30 points or 0.20 per cent.
“The Fed has delivered a quarter-point rate cut, marking its third reduction this year and taking the policy rate to the lowest level in over three years,” said Rajesh Palviya, SVP – Research at Axis Securities. “The move signals that concerns over slowing growth and labour-market softness now outweigh earlier fears of persistent inflation.”
The Federal Reserve’s decision, while widely expected, came with a divided committee — two members favoured no cut while one argued for a deeper 50 bps reduction. “Inflation remains sticky at 2.8 per cent, unemployment has climbed to 4.4 per cent, and the Fed is now focused on supporting growth without risking another inflation rebound,” said Ponmudi R, CEO of Enrich Money, a SEBI registered online trading and wealth tech firm.
US markets rallied after the announcement, with the Dow gaining over 1 per cent and the S&P 500 rising 0.68 per cent. Asian markets opened firm, supported by the US rebound and improving manufacturing data from China. However, the up-move in Indian markets was short-lived as persistent rupee weakness kept investors cautious. “Fresh concerns over delays in achieving any meaningful progress in the India–US trade negotiations further weighed on sentiment, prompting profit-booking in frontline stocks,” Ponmudi added.
On the Nifty50, Eternal led gainers, rising 2.28 per cent to ₹289.70, followed by Tata Steel which gained 1.63 per cent to ₹164.87. Shriram Finance advanced 1.30 per cent to ₹848.10, while Kotak Mahindra Bank climbed 1.27 per cent to ₹2,156.60. Maruti Suzuki rose 1.03 per cent to ₹16,184.
On the losing side, Trent fell 1.08 per cent to ₹3,975, while Titan declined 1.00 per cent to ₹3,807.20. Asian Paints dropped 0.81 per cent to ₹2,781.90, HDFC Life slipped 0.80 per cent to ₹764.90, and SBI Life decreased 0.55 per cent to ₹2,003.40.
“From a technical perspective, the market is forming lower highs on daily and intraday charts, indicating potential further downside from current levels,” said Shrikant Chouhan, Head Equity Research at Kotak Securities. “For day traders, the support zone at 25,750/84,400 will be crucial. As long as the market stays above this level, the pullback is likely to persist.”
“For India, a more accommodative Fed and a maturing global rate cycle ease worries around dollar strength and capital outflows, creating a constructive backdrop for the rupee and domestic liquidity,” Palviya noted. “In this environment, buying interest in financials, consumption, and select rate-sensitive sectors is likely to remain resilient.”
Devarsh Vakil, Head of Prime Research at HDFC Securities, observed that “markets interpreted the move as dovish but not the start of an aggressive easing cycle, tempering expectations for risk assets and rate-sensitive sectors.” He added that projections showed the median policymaker expects just one additional quarter-point cut in 2026.
“The Nifty continues to trade above the rising channel support drawn from the October lows, and the 20-EMA near 25,955 and the 50-EMA near 25,729 are still holding as dynamic support,” Ponmudi explained. “A move back above 25,860 will be the first sign of intraday strength, opening the path toward 25,950 and the psychological 26,000 mark.”