Indian Markets Open Steady with Fed Rate Cut in Focus, Experts Advise Caution

The Indian stock markets displayed a sign of caution on Monday as they opened slightly lower after a substantial rally the previous weekend, which was a reflection of the caution of investors regarding the upcoming meeting of the US Federal Reserve that will take place on December 9-10.

Market participants are very much aware that the global financial cues, the tariff negotiations and the geopolitical developments are all coming together in a way that the month of December could end up being influenced by whichever way the sentiment swings.

The Nifty 50 opened at 26,159.80, down 26.65 points (-0.10%), while the BSE Sensex started at 85,624.84, falling 87.53 points (-0.10%).

Domestic Fundamentals Remain Strong

Analysts are saying that the mainstay of India’s economy at present is great, with the recently RBI rate cut as an added booster. However, investors are waiting for things to clear up regarding tariffs before they come in flocking for the year-end rally.

“The RBI’s rate cut led to the enhancement of the interest rate-sensitive sectors in the case of Indian markets apart from the real estate sector. The Fed’s rate cut will bolster emerging markets’ inflows by making the dollar weak. The visit of the US trade delegation gives rise to the anticipation of tariff relief which can lead to a powerful rally at the end of the year,” said Ajay Bagga, Banking & Market Expert.

Bagga further said that the rate cut of 25 basis points by the Fed is factored into the market, but the move may come with a hawkish tone due to dissent among the FOMC members and this will keep the global markets on their toes.

Broader Market Trends

• Nifty 100 opened down 0.2%
• Nifty Midcap and Small Cap indices also started in red, reflecting pressure on non-index heavyweights
• Sectoral performance: Nifty IT, Media, and Metals started positive, while Nifty Auto (-0.3%), FMCG (flat), and Pharma (-0.29%) saw selling pressure

“The Nifty 50 remained flat last week due to conflicting factors. Although it still shows strong relative strength, it is inching toward new highs. The trading above the key moving averages indicates the possibility of upward momentum,” said Sunil Gurjar, SEBI-registered Analyst, Alphamojo Financial Services.

Meesho IPO Allotment Today

The allotment for the Meesho IPO, which was oversubscribed 23.33 times, will be finalized today. The retail segment alone was 15 times subscribed, QIB 17 times, and NII 28 times, indicating a strong demand from investors.

• Price Band: ₹105–₹111 per share
• Total Issue Size: ₹5,421 crore

Global Markets & Geopolitical Concerns

• The influence of the global factors on investor sentiment remains:
• China-Japan relations remain tense
• The US National Security Strategy raises concerns in Europe and South America
• The forthcoming meetings of the ECB, Bank of England, and Bank of Japan will shape global market momentum

The Bank of Japan is expected to increase interest rates by 0.25%, which can shift the carry trade calculations. The Asian markets on Monday displayed mixed trends:

• Nikkei 225 (Japan): -0.13%
• Hang Seng (Hong Kong): -0.77%
• Straits Times (Singapore): -0.34%
• KOSPI (South Korea): +0.22%

What Investors Should Watch

• The domestic markets may show fluctuation in their prices in the short term due to Fed cues.
• Support and resistance levels in Nifty 50 and Sensex are to be watched keenly.
• The allotment of the Meesho IPO along with the decisions of the global central banks could determine the short-term movements of the markets
• With both domestic and global factors influencing, investors are advised to take a cautious but strategic route as the year-end rally continues.