Nifty, Sensex Trades With Big Gain as US Fed Signals Rates Cut

The US Federal Reserve left benchmark rates unchanged on Wednesday and signaled the end of monetary policy tightening next year. Fed Chair Jerome Powell also hinted at rate cuts in 2024, which the market did not expect. Market watchers are predicting three rate cuts in 2024.

The Fed's dovish comments pushed the Dow Jones Industrial Average past the 37,000 mark for the first time. Subsequently, The Indian Stock market opened in green on Thursday. In early trade at around 10:35 Am Sensex was trading with 800 points or a 1% gain at 70383 and Nifty was up by 216 points or 1% at 21141. 

So far, the Fed has said rates may remain on hold because it is not confident inflation is fully under control.

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The latest comments signal the central bank's victory over inflation, which has been a major pain point for bond and equity investors over the past two years.

A sustained rally in equities and strength in the labor market has made the Fed's job tougher, as these two factors are major contributors to inflation as they boost consumption.

The job market is expected to remain strong soon as many employers are reluctant to let go of staff as labor shortages and strong corporate earnings push equities higher.

The Fed's decision to take a dovish view signals that the central bank believes inflation will remain under control even as the economy continues to grow.

Market experts are taking the US Fed move positively. They believe that the rate cuts next year would give a big reason for a rally in global markets. 

Analysts expect Nifty 50 to rise to 21,150-21,250 as Dow Jones rallies and GIFT Nifty indicates a gap up start.

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