Stock Market Update: Sensex Up 500 Points As Fed Reaffirms Rate Cut Plans For 2025

Indian Market Indices, Sensex opened in the green, up 541.55 points or 0.72 per cent at 75,990.60, while Nifty was up 158.30 points or 0.69 per cent at 23,065.90.

The latest Fed rate projections show that a narrow majority of officials continue to expect a total of half a percentage point in rate cuts this year, implying two quarter-point reductions, unchanged from their December forecast.

Wall Street indices extend their gains, ending the overnight session on a high. The Dow Jones Industrial Average, S&P 500, and the tech-heavy Nasdaq rise between 1-1.4 per cent as investors react positively to the Fed’s stance.

Asian stock markets opened on a strong note, tracking Wall Street’s gains after the US Federal Reserve decided to keep interest rates unchanged at 4.25-4.50 per cent, in line with market expectations. Australia’s S&P/ASX 200 rose 0.77 per cent, South Korea’s Kospi climbed 0.64 per cent, and the small-cap Kosdaq gained 0.55 per cent. However, Hong Kong’s Hang Seng index futures stood slightly lower at 24,719, compared to the previous close of 24,771.14. Japan’s markets remained shut for a holiday.

The Federal Reserve acknowledged rising uncertainty in the economic outlook, citing upside risks to inflation, especially in light of former US President Donald Trump’s proposed tariff policies. In response, the central bank raised its median estimate for core inflation to 2.8 per cent from 2.5 per cent and lowered its 2025 economic growth projection to 1.7 per cent from 2.1 per cent. The unemployment rate estimate was also adjusted slightly higher to 4.4 per cent from 4.3 per cent.

Fed Chair Jerome Powell highlighted the challenge of assessing the precise impact of tariffs on inflation but noted that recent surveys suggest inflation expectations are rising due to trade policies. “The positive reaction from markets likely reflects some relief that despite the potential for tariffs to drive inflation modestly higher, Fed Chair Powell reiterated that they believe the inflationary impact of tariffs will be transitory,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

On the domestic front, Milan Vaishnav, Founder of Gemstone Equity Research & Advisory Services, noted that Nifty has rebounded from the 21,900–22,000 zone, which aligns with the 100-week moving average. “In the immediate future, I expect these levels to hold. On the upside, Nifty is likely to take a breather in the 23,000–23,150 zone, where it will face strong resistance,” he said.

Given this market setup, Vaishnav advised investors to adopt a selective and stock-specific approach. “Rather than chasing stocks that have surged too rapidly, it is crucial to focus on those with strong technical setups and improving relative strength,” he added.

On March 19, Indian equity benchmarks extended their rally for the third consecutive session, led by strong buying in banking, oil & gas, and metal stocks. However, weakness in FMCG and IT stocks capped further gains. Meanwhile, midcap and smallcap stocks outperformed, with the Midcap 100 and Smallcap 100 indices surging 2.6 per cent and 2.43 per cent, respectively, continuing their strong momentum.