Mumbai (Maharashtra) [India]: The Indian stock market opened strong on Tuesday, driven by positive global cues and investor confidence in the US Federal Reserve maintaining its current interest rates.
The Sensex surged 388.45 points to open at 74,558.41, while the Nifty climbed 153.50 points to start at 22,662.25.
Among Nifty-listed companies, 43 stocks advanced while seven declined in early trade. The top gainers included Hindalco, ICICI Bank, Axis Bank, Shriram Finance, and M&M. Meanwhile, HCL Tech, TCS, Tech Mahindra, ONGC, and Sun Pharma were the top losers.
Market optimism was fueled by expectations that the Federal Open Market Committee (FOMC) would maintain its current interest rate stance.
Ajay Bagga, a banking and market expert, remarked:
“In a Central Bank policy-heavy week, where 10 central banks are announcing interest rate decisions, risk assets will be closely watching the US Fed. A 99% probability is baked into Fed futures for a ‘hold’ by the FOMC this week.”
He added, “The Bank of Japan and Bank of England are also expected to keep their policy on hold for now. US markets rallied for a second day on the back of stronger-than-expected retail sales numbers from the US. Asian markets are following through with most major Asian markets up this morning. Indian markets saw a steep FPI cash sales number but managed to end Monday in the green on the back of strong DII numbers.”
Global markets showed strength, with US markets rallying for a second consecutive day due to robust retail sales data. This positive momentum carried over to Asian markets, where most major indices traded higher on Tuesday morning.
Despite significant foreign portfolio investor (FPI) cash sales, Indian markets held firm on Monday, supported by strong domestic institutional investor (DII) activity.
However, Bagga cautioned about potential volatility following the FOMC meeting.
“We are expecting some selloff on Wednesday post the FOMC meeting as the Fed futures are showing that the markets are discounting as many as three rate cuts in 2025. Any hawkish Fed speak on this front could lead to a small selloff in the markets on Wednesday in the US,” he warned.
Investors are now closely watching the Federal Reserve’s policy decision and subsequent commentary, which could significantly influence market trends in the coming days.