There was a surge in India’s stock markets, Sensex and Nifty on Monday. This rise has come with the expectation that the Federal Reserve may see a cut in interest rates. In fact, US inflation figures have been lower than expected, but the figure has reached 3 percent. On the other hand, positive things have come to light regarding trade talks between America and China. On the other hand, there is a possibility of a trade deal between India and America in November. Due to which there has been a lot of enthusiasm among the investors. The effect of which is visible in the form of rise in the stock market.
If we talk about stock market data, during the trading session, the main index of Bombay Stock Exchange Sensex rose by more than 720.2 points to reach an intraday high level of 84,932.08. While the National Stock Exchange’s main index Nifty 50 rose by more than 200 points and reached the day’s highest level of 26,005.95. The Nifty index is now just 1 per cent away from its all-time high of 26,277.35, while the Sensex is down 1.2 per cent from its record high of 85,978.25. Let us also tell you which factors are working to bring gains in the stock market?
Expectations of Fed cutting interest rates
Lower than expected US inflation data in September has boosted expectations of further interest rate cuts by the Federal Reserve in 2025. US consumer price inflation declined last month, further strengthening expectations that the Fed may cut interest rates at its policy meetings in November and December. Low interest rates in the US generally make emerging markets like India more attractive to foreign investors.
Progress in US-China trade talks
Optimism about reducing global trade tension also boosted sentiment. Senior Chinese and American economic officials have reportedly finalized the outlines of a potential trade deal that will be reviewed by US President Donald Trump and Chinese President Xi Jinping later this week, US officials said on Sunday. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that the global market trend is bullish, as can be seen from Dow Jones, Nikkei and Kospi reaching record highs. The sentiment remains positive. He further said that US Finance Minister Scott Besant’s comment that there is a concrete framework for trade talks with China is an indication that a US-China trade agreement is on the way.
Agreement between India and America
On the other hand, there is a possibility of a trade agreement between India and America soon. If experts are to be believed, a trade deal can be struck between the two countries in the month of November. Recently news has come that America can reduce the 50 percent tariff on India to 15 to 16 percent. On the other hand, India has accepted America’s demand of not buying Russian oil, as claimed by the US President. Due to which there is no deadlock regarding trade deal between the two countries. Due to which there is positive sentiment regarding the stock market among Indian investors. We may see more growth in the stock market in the coming days.
rupee strength
The Indian rupee has outperformed most of its regional peers in October, supported by continued interventions by the Reserve Bank of India, which have helped stabilize the currency after a string of negative global indicators. So far this month, the rupee has seen an increase of about 1 percent. However, on Monday it weakened marginally to 87.9850 per US dollar. Heavy intervention by the central bank earlier this month lifted the rupee from near record lows, and traders suggest the RBI now looks to defend the currency around 88.
Apart from stabilizing the exchange rate, the RBI’s steps have helped the rupee outperform against other Asian currencies, while the dollar has also strengthened due to weakness in the euro and Japanese yen amid political uncertainty this month. The dollar index rose more than 1 percent against a basket of major currencies in October, while the Korean won and the Philippine peso fell about 2 percent and 0.7 percent, respectively. Adding to the momentum, strong foreign portfolio flows have also supported the rupee, with foreign investors buying about $2.7 billion worth of Indian equities and bonds so far this month.
Income and festive season momentum
India’s domestic infra is showing new strength, which is being boosted by strong demand from the festive season and signs of increase in capex of the private sector. Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said the long-awaited reform in capex will have a significant positive impact on India’s growth and stock market. Vijayakumar said that the conditions are favorable for Nifty and Sensex to reach record highs.
Meanwhile, banking stocks continued to rise on the back of strong quarterly earnings. Nifty Bank and Nifty PSU indices rose up to 1 per cent each on a pick-up in earnings led by strong performance of HDFC Bank, ICICI Bank, State Bank of India and other lenders in Q2FY26.