US Fed cutting rates indicate that it is more ahead: what it means for the Indian stock market, and the shares that are likely to respond

On Wednesday, September 17, the US Federal Reserve decided to lower the measures of the benchmark by 25 basis points, amid signs of growing tensions in the labor market. The FOMC voted by a majority of 11: 1 to lower the federal fund rate by 25 bps and bring it to a range of 4 percent to 4.25 percent. The Fed’s policy decision was largely in line with the expectation. The central bank gave subtle tips to make further relief in the coming months, but he emphasized that policy decisions will remain anchored to incoming data and developing situations. “The median participant projects that the appropriate level of the federal fund rate will be 3.6 percent at the end of this year, 3.4 percent at the end of 2026, and 3.1 percent at the end of 2027. This road is 1/4 percentage point (25 bps) lower than what was projected in June,” Fed chairman Jerome said. “As is always the case, these individual predictions are subject to uncertainty, and it is not a committee plan or decision. Policy is not on a predetermined course,” Powell added. Fed’s mixed signals have caused volatility in the US market. Dow Jones jumped about 500 points, but soon relieved, just to get higher again. US Fed rate cut: How can it affect the Indian stock market? Experts believe the market has already discounted a 25 -BPS rate cut, so the Fed’s in September rate could have a limited impact on the Indian stock market. However, Powell’s most beautiful tone can affect investors’ risk appetite. “A 25 -BPS rate reduction will not increase the Indian stock market as it is largely discounted.” A cumulative 50 bps or even greater cuts will be a positive for the Indian market, “says G. Chokelingam, founder and research head at Equinomics Research Private Limited. An overall reduction of 75-100 rate will be positive for emerging markets such as India as it will alleviate US dollar and bond returns and cause the inflow of foreign capital. “If the Fed goes for one or two extra reduction this year, the global risk sentiment can improve – the upliftment of stocks, including Indian markets, while relieving the effects of the bonds and printing the dollar,” says Ajit Mishra, SVP of research at Religare Broking. Mishra believes that Select It, Banking and Financial Stocks, including TCS, HCL Tech, Infosys, HDFC Bank, Kotak Mahindra Bank, SBI, PFC, Bajaj Finance and M&M Finance, may respond because of the Fed’s policy decision. The Fed must make stricter policy choices as it must balance the control of inflation with supportive growth. According to Madhavi Arora, chief economist at Emkay Global Financial Services, if the central bank is taking a more accommodating attitude, it can give central banks in emerging markets, including the Reserve Bank of India (RBI), a greater flexibility to maintain or facilitate their own policy. Read all market -related news here read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, not coin. We advise investors to consult with certified experts before making investment decisions, as market conditions can change quickly and conditions can vary.