Benchmark indices opened on a positive note on Friday, with the rising 468.44 points or 0.55 per cent to 84,950.25 and the gaining 133.90 points or 0.52 per cent to 25,949.45 in early trade, tracking firm global cues after lower-than-expected US inflation data reinforced expectations of further interest rate cuts by the Federal Reserve.
The Sensex had closed at 84,481.81 in the previous session, while the Nifty closed at 25,815.55. Both indices opened higher today at 84,756.79 and 25,911.50 respectively, extending gains as the session progressed.
“Global markets are trading with a positive bias, led by firm gains in US equities after lower-than-expected November consumer price inflation data reinforced expectations of further interest-rate cuts by the US Federal Reserve, triggering a shift toward a risk-on environment,” said Ponmudi R, CEO of Enrich Money. “Sentiment was further boosted by better-than-expected earnings from chipmaker Micron Technology and a strong quarterly revenue outlook, which reignited optimism around the AI and technology space.”
US markets surged overnight, with the Nasdaq climbing 1.38 per cent, while the S&P 500 and Dow Jones advanced 0.79 per cent and 0.14 per cent respectively. The Labour Department data showed consumer price growth at 2.7 per cent annually in November, lower than anticipated, boosting hopes for Federal Reserve rate cuts in 2026.
Among the top gainers on the Nifty 50, led with a gain of 1.91 per cent to ₹1,068.50, followed by Tata Motors Passenger Vehicles up 1.87 per cent at ₹352.25, and gaining 1.81 per cent to ₹390.40. rose 1.40 per cent to ₹2,054.70, while advanced 1.39 per cent to ₹296.35.
On the losing side, declined 1.20 per cent to ₹859, while fell 0.34 per cent to ₹1,655.70. slipped 0.19 per cent to ₹1,602.60, while and remained nearly flat with marginal losses.
“Overnight strong US market close is expected to aid sentiment for local markets in early trades, as the US inflation data for December coming in at 2.7 per cent has strengthened expectations of a quarter percentage point rate cut by the Fed,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities. “A lower US policy rate typically improves global risk appetite, and for emerging markets like India, this means stronger foreign inflow potential, a healthier rupee, and better liquidity.”
However, market experts remained cautious about the sustainability of the rally. “FIIs stopping selling during the last two days, though a positive from the market perspective, doesn’t indicate a directional change in the market,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “A lot will depend on the Bank of Japan’s rate decision today.”
On the institutional front, Foreign Institutional Investors extended their buying for a second consecutive session on December 18, purchasing equities worth nearly ₹600 crore, while Domestic Institutional Investors remained strong buyers with inflows of ₹2,700 crore.
“From a technical perspective, the Nifty 50 remains in a consolidation phase,” said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking. “The index continues to trade within the 25,700–25,900 range, reflecting trader indecision. Immediate resistance is placed at 25,900–26,000, while key supports are seen at 25,700 and 25,600.”
Market analysts highlighted that persistent weakness in the rupee near record lows and delays in finalising India-US trade negotiations remain key near-term concerns for domestic markets. The Indian rupee, however, appreciated by 14 paise to settle at 90.24 against the US dollar on Wednesday, marking a second straight day of gains.