Sensex Jumps 410 Points, Nifty Tops 25,400 as Fed Rate Cut Lifts IT & Banking Stocks
Sensex jumps 410 points to 83,059 and Nifty tops 25,400 after US Fed’s first rate cut of 2025. IT and banking stocks lead the rally as global cues boost investor sentiment.
Sensex surges 410 points to 83,059 as Nifty closes above 25,400 on Fed rate cut boost.
On Thursday, September 18, 2025, the Indian stock market climbed after the rate of interest was lowered by 25 basis points by the US Federal Reserve, initiating a global equity rally. The Sensex gained 410 points to settle at 83,059, and the Nifty closed above 25,400 for the first time, with the rise coming on very strong gains in IT and banking stocks.
The Rally in IT & Banking
The investor sentiment was investor-friendly because of the Fed's dovish tone, with the BSE IT index rising 1.5%. The top performers were Tech Mahindra, TCS, Infosys, Wipro, and LTIMindtree. ICICI Bank and Bajaj Finserv also helped bring in momentum.
There were marginal gains for midcap and smallcap indices, with metals dragging them down, making the BSE Metal Index the only one in red.
- Top Gainers: Tech Mahindra, ICICI Bank, TCS, Bajaj Finserv, Trent
- Top Losers: Hindalco, Bajaj Finance, Apollo Hospitals, SBI, SBI Life Insurance
- Global Cues: The Fed Does First Rate Cut of 2025
In an instance where jobs were not picking up fast enough, inflation remained stubborn, and political clamor increased, the US Federal Reserve threw in the towel and cut its benchmark rate, lowering it to 4–4.25%, the first cut this year. It is thus expected that this growth-oriented policy could push consumers to start spending, and foreign inflows would rush into emerging markets like India.
Analysts believe that lower US rates will help in strengthening the rupee, provide relief from imported inflation, and smoothen the course of higher interest rates by giving RBI flexibility in policy actions.
Corporate Highlights
- KPI Green Energy has launched the first externally credit-enhanced green bond in India worth ₹670 crore, listed on the NSE.
- Dixon Technologies has acquired a 51% interest in Kunshan Q Tech for ₹553 crore, marking its entry into mobile and auto components.
- Biocon Biologics has received USFDA approval for biosimilars in osteoporosis and cancer.
- IRM Energy extended its rally, soaring by 8% to ₹356.55.
- Saregama India jumped up by 2.9% for its best two-month performance.
Expert Views
“The Fed’s rate cut, combined with India’s domestic factors like GST rationalisation and RBI’s earlier easing, has created a strong growth environment,” said Rajesh Palviya, SVP – Research at Axis Securities. “BFSI, IT, FMCG, and auto sectors look well-positioned.” G. Chokkalingam of Equinomics Research added, “A 25 bps cut won’t be a game-changer, but a cumulative 50–75 bps cut could significantly boost Indian equities.” Subho Moulik, CEO of Appreciate, added that further cuts by late 2025 are expected in the markets, which would initiate renewed FPI inflows benefiting the rupee.
Reasons behind Fed decision
- Weak jobs market: 22,000 jobs were added in August compared to 79,000 a month earlier.
- Rise in unemployment: 4.3% against 4.2%.
- Sticky inflation: CPI at 2.9% in August; PCE index steady at 2.6%.
Last month, Fed Chair Jerome Powell had indicated the possibility of policy adjustments, which were bolstered by political pressure from President Trump to deepen cuts.
Outlook for Indian Markets
While the rally on Thursday was fuelled by global cues, another thing that investors would be seeing will be how January will progress in India-U.S. trade talks and India-EU FTA negotiations scheduled for October-The.
Market watchers believe Powell's future guidance on inflation and growth will be the main driver. A more dovish stance could possibly unleash foreign money to complement domestic triggers, including reforms, a promising monsoon, and the revival in corporate earnings.
