Mumbai: After a flat start, the Indian benchmark indexes gained traction this week when the US Federal Reserve stunned everyone with a 50 basis point rate cut. The Sensex reached 84,000 for the first time, and the Nifty set a new all-time high.
According to market analysts, the fear of a slowdown in growth was alleviated slightly by lower-than-expected US jobless claims, and statistics pointed to a soft landing for the US economy at the start of the rate-cut cycle.
The continued positive momentum is expected to propel the Nifty to levels between 25,900 and 26,000. On the upside, 26,000 will serve as an immediate barrier for Nifty.
“On the downside, 25,500 will serve as an immediate support for Nifty followed by 15-DEMA support, which is placed near 25,300 levels. As long as Nifty stays above 25,600, a ‘Buy on Dips’ strategy is advisable for traders,” said Hrishikesh Yedve from Asit C Mehta Investment Intermediates.
Following the Fed’s rate cut, Indian markets have seen fresh buying interest, particularly in sectors that were previously under selling pressure.
“The resilience of the Indian markets is providing additional strength to the rupee. Key support levels for the rupee are seen at 83.60-83.65, while resistance lies in the range of 83.40-83.30,” said Jateen Trivedi from LKP Securities.
The rupee traded positively, with gains of 0.10 at 83.53, supported by continued weakness in the dollar index, which is trading at 52-week lows.
Analysts saw a sectorial rotation among investors to large caps, especially in consumption, staples, auto, finance, and realty.
They added that in the short term, investors are cautious about export-oriented sectors like pharma and IT due to the dollar’s depreciation.
Gold traded very positively, reaching an all-time high in Comex above $2,610, driven by strong liquidity inflows from the US Fed following a significant rate cut.
Analysts said the outlook for gold continues to favour upward momentum, with further rate cuts likely boosting prices.
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–IANS
