Stock Markets Surge In Early Trade After US Fed Rate Cut

Mumbai- Benchmark indices Sensex and Nifty started the trade on a buoyant note on Thursday propelled by buying in IT stocks after the US Federal Reserve cut its key interest rate by 25 basis points and signalled the possibility of two additional rate reductions this year.

The 30-share BSE Sensex rallied 447.5 points to 83,141.21 in early trade. The 50-share NSE Nifty climbed 118.7 points to 25,448.95.

From the Sensex firms, Infosys, HCL Tech, Tech Mahindra, HDFC Bank, Sun Pharma and Tata Motors were among the major gainers.

However, Bajaj Finance, Tata Steel, UltraTech Cement and Kotak Mahindra Bank were among the laggards.

“The Fed signalled the possibility of two additional rate cuts later this year, which boosted investor sentiment. Asian markets opened nearly 1 per cent higher, while US index futures rose over 0.5 per cent in response,” according to a report by Motilal Oswal Financial Services Ltd.

Overnight, US markets ended mixed after the Fed announced a 25 basis points rate cut-the first of the year-which was in line with Wall Street expectations, it added.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index traded in positive territory while Hong Kong's Hang Seng quoted lower.

US markets ended on a mixed note on Wednesday.

“The ongoing rally in the market is driven by expectations of earnings revival and a positive outcome from the India-US trade negotiations,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

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