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Indian Stock Market Ends Bullish: How Fed Rate Cut Fuels FII Inflow Hopes

The Indian stock market wrapped up the week on a strong note despite some earlier losses. A key boost came from the US Federal Reserve's decision to cut interest rates, which improved global liquidity sentiment. This change fueled hopes that foreign institutional investors might return to Indian equities. While broader indices underperformed, analysts see a constructive backdrop supported by domestic investments and central bank policies.

Key Points: Indian Stock Market Rises on Fed Rate Cut and FII Inflow Hopes

  • Nifty surged 0.57% on the last trading day after the US Fed's rate cut
  • Benchmarks dipped slightly for the week amid earlier FII outflows and global uncertainty
  • Sector performance was mixed, with IT under pressure but PSU banks saw buying
  • Analysts cite rupee stability and trade clarity as key near-term market sensitivities
2 min read

Indian stock market ends in bullish tone over hopes of renewed FII inflows

Indian equity benchmarks closed the week bullish as a US Fed rate cut eased liquidity concerns, sparking optimism for renewed foreign investor inflows.

"Nifty's weekly chart shows buying interest at lower levels. - Hrishikesh Yedve, AVP Research, Asit C. Mehta"

Mumbai, Dec 13

Indian equity benchmarks made marginal losses during the week amid sustained FII outflows and uncertainty surrounding the US-India trade negotiations.

However, the market ended the week in a bullish tone with Nifty surging 0.57 per cent on the last trading day after the US Federal Reserve announced a 25-bps rate cut.

Benchmark indices Nifty and Sensex dipped 0.36 and 0.17 per cent during the week to close at 26,046 and 85,267, respectively.

Indian equities opened the week on a subdued note, amid continued rupee depreciation and negative global cues due to rising Japanese bond yields.

The US Fed rate cut later in the week eased liquidity concerns and fuelled hopes of renewed FII inflows. With supportive central bank policies, steady domestic investments, and optimism over trade progress despite unclear timelines, benchmarks closed the week on a strong note.

India's year-on-year inflation rate based on the Consumer Price Index (CPI) was estimated at 0.71 per cent for November this year which was marginally higher than the 0.25 per cent in October, according to figures released by the Ministry of Statistics.

Broader indices underperformed, with the Nifty Midcap100 and Smallcap100 down 0.51 per cent and 0.67 per cent, respectively, in a week.

Sectoral performance was mixed, with IT under pressure while PSU banks, real estate and consumer durables witnessed selective buying.

Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediates, said that Nifty's weekly chart shows buying interest at lower levels.

Nifty has 26,200 and 26,325 as stiff resistance levels while 25,700 will act as support zone, he added.

Analysts said that markets will likely remain positive in near future but sensitive to rupee stability, FII flow trends, trade agreement clarity, and cues from major central banks abroad.

Amidst risks from currency fluctuations and global trade uncertainties, improving earnings visibility and liquidity support provide a constructive backdrop and downside protection, they added.

- IANS

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Reader Comments

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Priya S
It's good to end the week on a high note, but let's not get carried away. The broader market (Midcap & Smallcap) is still down. My portfolio is in the red because of overexposure to these segments. Retail investors like us need more stability, not just Sensex/Nifty gains.
V
Vikram M
The article rightly points out the rupee stability is key. FIIs will come and go based on global factors, but a volatile rupee hurts everyone. RBI needs to manage this carefully. Also, good to see PSU banks getting some love!
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Sarah B
Watching from the US, the Fed's move was expected. Interesting to see its immediate impact on Indian markets. The interconnectivity is fascinating. Hope the trade negotiations progress smoothly for the sake of stability.
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Rohit P
Mixed feelings. The headline is bullish, but the weekly close is still down. Inflation is creeping up slightly too. It feels like the market is being propped up by hope rather than solid data. Time to be cautious and maybe book some profits.
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Kavya N
As a long-term SIP investor, these weekly fluctuations don't bother me much. The underlying story is positive - domestic investments are steady, earnings visibility is improving. That's what matters for wealth creation over 10+ years. Stay invested!

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