Mumbai Stock Markets Reach New High Amid Global Rate-Cut Optimism
Mumbai’s stock markets achieved a new peak this week, buoyed by global rate-cut optimism that has invigorated investor sentiment worldwide. Industry experts attribute the uplift to recent monetary policy adjustments and favorable domestic factors.
The European Central Bank (ECB) took a significant step this week by reducing its deposit rate by 25 basis points to 3.50 percent, a move aimed at stimulating sluggish economic growth within the Eurozone. This rate cut has had a ripple effect, contributing to the positive momentum observed in global markets.
Attention now shifts to the US Federal Reserve, which is scheduled to announce its interest rate decision on September 18 following a two-day Federal Open Market Committee (FOMC) meeting. Market analysts are keenly awaiting the outcome of this meeting, which is expected to provide further direction for global financial markets.
In the domestic arena, the Indian stock indices have rebounded from previous negative sentiments, which were influenced by SEBI’s deadline for Foreign Institutional Investors (FIIs) disclosure norms and concerns over a potential US recession. This week, domestic markets overcame these headwinds, supported by a strong monsoon and anticipations of increased demand during the upcoming festive season.
On Thursday, Indian equity indices hit new all-time highs, with the Sensex reaching 83,116 and the Nifty touching 25,433 intraday. Nearly all sectors recorded gains, with notable performances in the auto, IT, public sector undertakings (PSUs), financial services, pharmaceutical, metal, and energy sectors.
The positive trajectory of domestic indices reflects a broader trend of resilience despite market volatility. Analysts have observed that domestic institutional investors (DIIs) and foreign institutional investors (FIIs) have maintained positive inflows, contributing to the overall bullish sentiment.
According to Crisil Market Intelligence and Analytics, domestic government securities (G-sec) bond yields are likely to be influenced by several factors, including foreign portfolio investor (FPI) flows, fluctuations in crude oil prices, the outcomes of the FOMC meeting, and domestic inflows into the debt market. The 10-year G-sec yield is anticipated to be shaped by these variables, as well as by consumer price index (CPI) inflation data, the Reserve Bank of India’s (RBI) monetary policy committee (MPC) decisions, and broader geopolitical and economic developments.
Rupak De, Senior Technical Analyst at LKP Securities, highlighted that the Nifty index has been performing robustly, sustaining above the critical 21-day exponential moving average (EMA). This trend suggests continued strength, with the index closing above recent consolidation highs.
As global and domestic factors converge to shape market dynamics, investors will be closely watching upcoming economic data and policy announcements for further cues on market direction.
