India's Stock Market to Rebound After US Federal Reserve Rate Cut

India's Stock Market Expected to Rise

India's stock market is likely to open higher on Thursday, following three days of losses. This is due to the US Federal Reserve's decision to cut interest rates by 0.25%. The rate cut could reduce the amount of money leaving India's stock market and make it more attractive to foreign investors.

Asian Markets Also See Gains

Other Asian markets have also seen an increase, with a 0.4% rise. The US stock market, also known as Wall Street, went up after the Federal Reserve's decision. The Nifty 50 and Sensex had previously lost around 1.6% each over the last three sessions due to foreign investors selling their shares.

Federal Reserve Decision

The head of the Federal Reserve, Jerome Powell, did not give clear guidance on whether another rate cut would happen soon. However, investors are hopeful due to his comments about the risks to the job market and the central bank's reluctance to hurt job creation. Lower interest rates in the US make countries like India more appealing to foreign investors.

Foreign Investors Sell Indian Stocks

So far in December, foreign investors have sold around $1.56 billion worth of Indian stocks. This is nearly four times the amount they sold in November. In fact, 2025 is likely to be the biggest year ever for foreign investors selling Indian stocks, with around $18 billion sold so far.

What to Expect Next

While the Federal Reserve's rate cut may lead to a short-term increase in India's stock market, a long-term rise will depend on the country's quarterly earnings and a favorable trade deal with the US. Some key stocks to watch include:

• Tata Steel, which has approved the acquisition of a 50% stake in Thriveni Pellets for 6.36 billion rupees.
• Life Insurance Corporation of India, which has received a tax demand order with interest of 23.7 billion rupees.
• IndiGo, which has cut its December-quarter capacity and passenger unit revenue forecast after mass flight cancellations.
• Mazagon Dock, which has entered a pact with the Indian Navy and Brazilian Navy for sharing information on maintenance of Scorpene-class submarines.

These developments are likely to impact the Indian stock market and are worth keeping an eye on. The Indian stock market, including the Nifty 50 and Sensex, will be influenced by these factors and the overall market trends.