Sensex, Nifty edge higher on dovish Fed expectations amid fresh foreign fund inflows

Indian equity benchmarks rebounded in early trade on Wednesday, mirroring strong global sentiment amid optimism over a potential US Federal Reserve rate cut and renewed foreign fund inflows.

The 30-share BSE Sensex rose 287.94 points to 84,916.10, while the NSE Nifty gained 86.65 points to 26,022.85 in early deals.

Among the major gainers on the Sensex were Asian Paints, Tata Steel, Trent, Larsen & Toubro, State Bank of India, and Adani Ports. On the other hand, Mahindra & Mahindra, Bajaj Finance, Eternal, and Axis Bank traded in the red.

“Global markets remain upbeat, buoyed by the sustained rally in the US,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Investors are awaiting the Fed’s decision, which is widely expected to include a 25-basis-point rate cut. However, the commentary on quantitative tightening will be key.”

Asian markets were largely higher, with South Korea’s Kospi, Japan’s Nikkei 225, and Shanghai’s SSE Composite Index all trading in positive territory. Overnight, US markets closed with solid gains.

Foreign Institutional Investors (FIIs) continued to show confidence in Indian equities, purchasing shares worth Rs 10,339.80 crore on Tuesday, according to exchange data.

“A dovish tone from the Fed could further boost liquidity flows into emerging markets such as India, allowing the Sensex and Nifty to maintain their upward momentum near record highs,” said Ponmudi R, CEO of Enrich Money.

Meanwhile, global oil benchmark Brent crude edged 0.08 per cent lower to USD 64.35 per barrel.

“Despite some volatility yesterday, the market sentiment remains positive thanks to strong FII buying, which has helped reinforce investor confidence,” noted Prashanth Tapse, Senior Vice President (Research) at Mehta Ltd.

On Tuesday, the Sensex had closed 150.68 points lower at 84,628.16, while the Nifty slipped 29.85 points to end at 25,936.20.