Indian Stock Market Opens in Red Following US Fed’s Dovish Rate Cut Stance
Mumbai: The Indian stock market opened in the negative territory on Thursday, following the US Federal Reserve’s recent decision to cut interest rates by 25 basis points. However, the Fed’s caution regarding future rate cuts in 2025 has caused market concern, as it halved the number of rate cuts expected for the year.
At around 9:30 AM, the Sensex was trading at 79,158.53, down by 1,023.67 points or 1.28%, while the Nifty was at 23,892.4, declining by 306.45 points or 1.27%. The market sentiment remained negative, with 223 stocks on the National Stock Exchange (NSE) in the green and 2,029 in the red.
Nifty Bank was down by 783 points, or 1.50%, at 51,356.55, while the Nifty Midcap 100 index dropped 943.85 points, or 1.61%, to 57,779.40. The Nifty Smallcap 100 index fell by 344.70 points, or 1.79%, to 18,885.65.
In the Sensex pack, Infosys, HCL Tech, Asian Paints, Tata Steel, Tech Mahindra, Tata Motors, SBI, JSW Steel, and Bajaj Finance were the top losers, while Hindustan Unilever and ITC emerged as the top gainers.
The Federal Reserve’s rate cut of 25 basis points matched market expectations. However, the market was spooked by the Fed’s updated forecast, which now includes only two subsequent 25 basis point cuts in 2025, down from the four cuts previously anticipated. This shift in the Fed’s stance, focused on balancing maximum employment and price stability, sparked a sharp sell-off in global markets, including a 2.58% decline in the Dow Jones and a 3.56% drop in the Nasdaq.
Asian markets followed suit, with markets in Jakarta, Bangkok, Seoul, Japan, China, and Hong Kong all trading in red. Despite the downturn, experts suggest that the current market correction presents buying opportunities, particularly in growth stocks. They also highlighted that the broader market might be less impacted due to minimal Foreign Institutional Investor (FII) selling in these segments.
On December 18, FIIs sold equities worth Rs 1,316.81 crore, while domestic institutional investors (DIIs) bought equities worth Rs 4,084.08 crore.
