Market Wrap: Sensex climbs 329 points, Nifty nears 25,000 as IT stocks rally on Fed rate-cut hints

Indian benchmark indices Sensex and Nifty closed higher Monday, lifted by IT shares after Federal Reserve Chair Jerome Powell signaled the U.S. central bank could cut interest rates as soon as next month.

The BSE Sensex rose 329.06 points, or 0.40%, to finish at 81,635.91, while the NSE Nifty gained 97.65 points, or 0.39%, to settle at 24,967.75.

Top Movers

On the 30-stock Sensex, the shares of Infosys, TCS, HCL Technologies, Tech Mahindra and Tata Motors led the gainers, advancing between 1% and 3%.

On a sectoral basis, IT stocks rose 2.4% to lead the advance, with the Nifty’s top four performers all from the sector. The country's two largest software exporters, TCS and Infosys, climbed 2.8% and 3.1%, respectively.

Metal stocks also advanced, with the sector up 0.7% as a weaker dollar buoyed commodity prices.

The rally came after Federal Reserve Chair Jerome Powell, speaking Friday at Jackson Hole, signaled the U.S. central bank could cut interest rates as soon as September, citing rising risks to the labor market while warning inflation remained a concern. Lower U.S. borrowing costs tend to make emerging-market assets, including India’s, more attractive to global investors.

Still, caution lingered ahead of fresh U.S. tariffs, with President Donald Trump’s additional 25% levy on Indian goods set to take effect Aug. 27, potentially raising duties as high as 50%. India’s mid- and small-cap stocks, more exposed to domestic demand, surrendered early gains to finish largely flat.

Expert Views

A wave of optimism swept through the domestic market, driven by expectations of a Fed rate cut in September and a subsequent decline in the US 10-year yield, said Vinod Nair, Head of Research at Geojit Investments, adding that the IT index outperformed, buoyed by favourable global sentiment.

"The domestic levers stay positive with the proposed GST rationalisation to push consumption demand, and a good monsoon season could serve as a catalyst to navigate any uncertainty in the global trade environment," said Nair.

On a technical basis, the Nifty fell short of the 25,000 mark, closing slightly below it, said Rupak De, Senior Technical Analyst at LKP Securities, adding that the sentiment remains positive as long as the index holds above 24,800.

"In the near term, particularly on Tuesday, the Indian market may trade sideways as traders await the final verdict on Trump’s additional 25% tariff decision on 27th August. The Nifty is expected to remain within the range of 24,800–25,150 before any decisive directional move," said De.

Global Markets

Hopes of imminent U.S. rate cuts buoyed world equities Monday, lifting Asian shares to multi-year highs even as Europe slipped on sector-specific drags.

MSCI’s broadest index of world stocks edged up 0.1%, holding near Friday’s record peak. In Asia, Chinese blue chips surged more than 2% to their strongest level since 2022, while Japan’s Nikkei added 0.4%.

In Europe, the STOXX 600 fell 0.2%, weighed by renewable energy stocks after the U.S. ordered Denmark’s Orsted to halt work on an offshore wind project near Rhode Island.

Commodities softened as the dollar firmed. Gold fell 0.3% to $3,363 an ounce, reversing part of last week’s 1% jump.

Crude Impact

Oil prices advanced Monday as traders weighed the risk of tighter Russian supplies amid fresh U.S. sanctions and Ukrainian strikes on energy infrastructure.

Brent crude added 39 cents, or 0.6%, to $68.12 a barrel by 10:23 GMT, while West Texas Intermediate rose 42 cents, or 0.7%, to $64.08.

Rupee vs Dollar

The Indian rupee surrendered early gains to close 0.1% weaker at 87.58 on Monday, slipping from 87.53 in the prior session as importers’ dollar demand and tariff worries weighed on sentiment.

The U.S. dollar, meanwhile, struggled to rebound from a four-week low. It edged 0.2% higher to $1.1699 per euro in Asian trading but remained close to Friday’s trough of $1.1742, its weakest level since July 28.

(With inputs from agencies)