Asian and Indian markets rally after US Fed rate cut
CHENNAI: Asian equities continued their rally following a firm start on Thursday (Sept.18), after the US Federal Reserve cut its benchmark interest rate by 25 basis points. The Fed also indicated the possibility of two more cuts this year, though Chair Jerome Powell stressed that the move was a precautionary step rather than the start of an aggressive easing cycle.
In Asia, Japan’s Nikkei, South Korea’s Kospi, and Taiwan’s Taiex moved higher, reflecting investor relief at easier monetary conditions. However, Hong Kong’s Hang Seng traded flat to slightly weaker, showing caution as traders weighed the Fed’s restrained outlook. The dollar index softened initially before recovering, while US Treasury yields edged lower, adding to support for Asian equities.
At 10.25 AM, Indian markets continued their rally, tracking global gains. The Sensex and Nifty rose in early trade, with the Nifty reclaiming levels above 25,400. Information technology stocks led the advance, supported by their strong exposure to the US market, while midcaps and smallcaps also posted modest gains. Positive domestic trade signals, including government expectations of export growth in 2025, helped underpin sentiment.
On the currency front, the rupee’s recent rally paused, with the local unit expected to open slightly weaker around ₹87.90 per dollar. Traders cited mixed cues from the Fed’s statement and the performance of Asian peers as reasons for near-term caution.
Market analysts noted that the immediate sentiment is upbeat, with global liquidity conditions improving after the Fed’s decision. However, key resistance levels remain in focus. For the Nifty, resistance is seen around 25,500–25,670, while support lies near 25,150–25,000. Bank Nifty is expected to find support at 55,000, with resistance around 55,500–56,000.
Looking ahead, investors will closely watch the movement of the rupee, foreign institutional investor flows, and the reaction of other Asian markets. Global data on US inflation and employment will also play a critical role in shaping expectations for further rate cuts. While the short-term outlook for Indian equities remains positive, sustained gains will depend on global cues, domestic earnings momentum, and sectoral leadership.