Sensex Surges Past 84,000 Amid Rate Cut Anticipation

The Indian stock markets are on an upward trend, with the Sensex crossing the 84,000 mark, driven by expectations of a rate cut by the RBI. Experts suggest that liquidity from US rate cuts is fueling this rally, boosting investor sentiment and pushing indices to record levels.

Domestic stock markets continue to surge, with the Nifty and Sensex indices maintaining their upward momentum. On Friday, the Sensex climbed beyond the 84,000 mark, achieving a 1,000-point rise in just eight days. This rally follows the Sensex's groundbreaking 83,000 milestone on September 12, and now the bull market is targeting the 85,000 level.

Experts credit this robust rally in Indian markets to the anticipation of a potential rate cut by the Reserve Bank of India (RBI), spurred by the US Federal Reserve's decision to reduce rates. They note that the US rate cut has increased liquidity in emerging economies like India, which offers more attractive investment returns due to higher interest rates compared to the US. Banking and market expert Ajay Bagga remarked to ANI, 'The Fed rate cut, especially a front-loaded jumbo rate cut, signals a shift of equity flows into emerging markets. India hasn't seen strong FII inflows due to high valuations of the MSCI India Index, but this could change as more liquidity becomes available.'

Bagga added that as liquidity flows increase, Foreign Institutional Investor (FII) flows might return robustly to the Indian markets. 'Any minor correction makes the Indian market more attractive, given its strong macroeconomics, pro-growth policies, substantial domestic consumption market, well-capitalized banks, and strong corporate earnings visibility,' he said. This liquidity influx is propelling Indian markets to new heights, with bullish investor sentiment as the markets continue their ascent.

Experts also observe that the expectation of an RBI rate cut is further fueling the optimism, driving Indian stock indices to record levels as investors foresee improved economic conditions and stronger corporate earnings. 'Yesterday, the Indian stock markets experienced a corrective phase, but the momentum is building up as investors anticipate an RBI rate cut following the US Federal Reserve's recent cuts,' said market expert Vijay Chopra. 'Markets often react ahead of official announcements, reflecting expectations. Investors are riding the rally, driven by the potential for lower interest rates, which would boost economic activity and corporate earnings.'

The Nifty index also reached a new high on Friday, closing at 25,725.60, while the Sensex hit a record 84,240.50 points at the time of reporting. (ANI)

(With inputs from agencies.)