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Markets extend gains for 3rd day on Fed Rate cut
Sep-18-2025

Indian equity benchmarks closed higher for the third consecutive day and ended with decent gains on Thursday, after the US Federal Reserve cut its key interest rate by 25 basis points and signalled the possibility of two additional rate reductions this year. Sentiment was also buoyed by recent goods and services tax reforms and progress in trade talks between India and the US. 

Some of the important factors in trade:

India’s CAD to stay under 1% of GDP despite tariff: The rating agency Crisil has indicated that India’s current account deficit (CAD) is likely to remain under control at 1% of gross domestic product (GDP) in FY26, despite of the challenges faced by the economy from higher tariffs and global geopolitical headwinds.  

Private capex jump unlikely in FY26: S&P Global in its latest report said while a jump in capital expenditure is unlikely this fiscal year, the prospects for the economic growth catalyst are much better over a medium-to-long term. Companies are likely to invest upward of $800 billion over the next five years. 

GST reforms to inject Rs 2 lakh crore into economy: Union Finance Minister Nirmala Sitharaman has said that the next generation GST reforms will infuse Rs 2 lakh crore into the economy, which will leave people with more cash in hand that otherwise would have gone as taxes.

Rupee falls against US Dollar: Indian rupee depreciated against the US dollar, on hawkish Fed and a bounce back in the US dollar. Besides, sustained foreign fund outflows also dented investors' sentiments. 

Global front: European markets were trading higher after the U.S. Federal Reserve cut interest rates for the first time since December and indicated more cuts would follow amid mounting signs of labor market weakness. Asian markets ended mostly lower following a slightly hawkish leaning policy decision from the Federal Reserve. 

Finally, the BSE Sensex rose 320.25 points or 0.39% to 83,013.96 and the CNX Nifty was up by 93.35 points or 0.37% to 25,423.60.     

The BSE Sensex touched high and low of 83,141.21 and 82,704.92 respectively. There were 22 stocks advancing against 8 stocks declining on the index.  

The broader indices ended mixed; the BSE Mid cap index rose 0.36%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.87%, IT up by 0.81%, TECK up by 0.57%, Bankex up by 0.36% and Metal up by 0.35%, while Capital Goods down by 0.33%, Energy down by 0.20%, Industrials down by 0.16%, PSU down by 0.10% and Basic Materials down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Eternal up by 2.96%, Sun Pharma up by 1.77%, Infosys up by 1.13%, HDFC Bank up by 1.05% and HCL Technologies up by 0.84%. On the flip side, Tata Motors down by 1.13%, Trent down by 1.04%, Bajaj Finance down by 0.83%, Asian Paints down by 0.63% and Ultratech Cement down by 0.60% were the top losers.

Meanwhile, Union Commerce Minister Piyush Goyal has expressed confidence that India's exports would grow by around 6 per cent this year compared to the corresponding period in 2024. Underscoring the country's strong performance in global trade despite challenges, he said discussions on free trade agreements (FTAs) were advancing with several countries. He said ‘I believe we will end the year on a positive note’, and added that discussions on free trade agreements (FTAs) were advancing with several countries.

He noted ‘India's growing strength and the fact that we will be moving in the Amritkal from a $4 trillion economy to a $30 trillion-plus economy clearly show that India is the place to do business. The world would like to work closer with India’. He emphasised that India's domestic momentum and external engagements were reinforcing each other. He said ‘We have recently come out with the lowest unemployment data at 5.1 per cent’.

He further said India is the fastest-growing large economy, and the infrastructure thrust and consumer demand expected from GST 2.0 will give another boost to investment, job creation, and expansion of trade and industry.

He highlighted that several countries were actively pursuing FTAs with India. He said ‘With the European Union, we had good discussions in the last round. Their two commissioners of agriculture and trade visited Delhi, and the discussions made rapid progress. We may have another virtual or physical round soon. EU President Ursula von der Leyen and Prime Minister Narendra Modi guided us to complete the negotiations by year-end, and we are continuing to work towards that goal’. Citing the successful free trade pact with the UAE, he said it was the world's fastest FTA.

He noted that the UAE was a ‘gateway for the African region, the Gulf, and Eastern Europe’ and a crucial trading partner for India. He added ‘There is a lot of investment interest from the UAE into India. I am very confident that this partnership will only strengthen further’. He also said similar discussions were underway with Peru, Chile, New Zealand, Oman and others. He noted ‘It is an ongoing process. Many countries want to start discussions on FTAs because India has immense potential’.

The CNX Nifty touched high and low of 25,448.95 and 25,329.75 respectively. There were 33 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index.  

The top gainers on Nifty were Eternal up by 2.92%, HDFC Life Insurance up by 2.22%, Sun Pharma up by 1.75%, Cipla up by 1.31% and Infosys up by 1.23%. On the flip side, Coal India down by 1.69%, Bajaj Finance down by 1.33%, Trent down by 0.93%, Tata Motors down by 0.92% and Tata Consumer Products down by 0.69% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 9.84 points or 0.11% to 9,218.21, France’s CAC rose 77.52 points or 0.99% to 7,864.50 and Germany’s DAX gained 257.12 points or 1.09% to 23,616.30.

Asian markets ended mostly lower on Thursday as the participants remained sidelines with the global economic slowdown fears. Technical correction in technological, manufacturing and export driven sector stocks saddled the local indices. Hawkish comments from Fed Chairman Jerome Powell dulled investor sentiments. Hang Seng tumbled in the session with the concerns about recession in China, regulatory uncertainties and capital outflows.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,831.66

-44.68

-1.15

Hang Seng

26,544.85

-363.54

-1.35

Jakarta Composite

8,008.43

-16.75

-0.21

KLSE Composite

1,598.93

-12.77

-0.79

Nikkei 225

45,303.43

513.05

1.15

Straits Times

4,312.62

-11.16

-0.26

KOSPI Composite

3,461.30

47.90

1.40

Taiwan Weighted

25,769.36

331.11

1.30
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