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Indian benchmark indices surged during early trading on Wednesday, with BSE Sensex jumping over 550 points, buoyed by positive global cues and growing optimism around a potential interest rate cut by the US Federal Reserve later this month. Leading the rally were major gainers like Nestle India, Jio Financial Services, Asian Paints, HDFC Life Insurance, and Bajaj Finserv, with stocks climbing as much as 3 per cent.
At around 11:24 am, the Sensex was up 482.08 points or 0.59 per cent at 82,512.06, while the broader Nifty climbed 151.45 points or 0.60 per cent to reach 25,296.95.
Key Drivers Behind The Market Upswing
One of the main catalysts for the market’s positive momentum was Fed Chair Jerome Powell’s recent remarks. Powell highlighted ongoing weakness in the US labour market while acknowledging that the broader economy remains relatively stable. He also maintained that inflation expectations are unchanged since the Fed’s last rate cut of 25 basis points in September.
These comments raised investor hopes for further easing, potentially involving two more rate cuts this year. Jigar Trivedi, Senior Research Analyst at Reliance Securities, said, “Fed Chair Jerome Powell warned that the sharp slowdown in hiring is increasingly threatening the US economy, hinting at the possibility of two more rate cuts this year.”
Additional factors supporting the market included easing volatility, with the India VIX dropping nearly 4 per cent to 10.76, signalling reduced uncertainty and encouraging equity investments.
Supporting Factors: Rupee Recovery, Oil Prices, and Global Markets
The Indian rupee strengthened by 88 paise to 87.93 against the US dollar, rebounding from its recent record lows. This recovery was driven by a weaker dollar index, dovish Fed signals, lower crude prices, and potential Reserve Bank of India intervention—factors that typically attract foreign capital.
Crude oil prices eased slightly, with Brent crude dipping 0.19 per cent to $62.27 per barrel amid concerns over a possible supply surplus next year, according to the International Energy Agency. Lower oil prices are generally favourable for India’s import-dependent economy.
Global equity markets also remained firm, with gains in South Korea’s Kospi, Japan’s Nikkei 225, China’s SSE Composite, and Hong Kong’s Hang Seng. US futures signalled a positive opening, adding further support to the sentiment.