9 Sep 2025: Indian stock market benchmark indices traded higher on Tuesday, buoyed by strong global cues and growing optimism that the U.S. Federal Reserve may deliver a rate cut in its upcoming policy meeting. The rally mirrored gains in major global markets as investors bet that cooling inflation data in the U.S. could push the Fed to ease monetary policy, potentially improving global liquidity conditions.
The BSE Sensex surged over 500 points in early trade, while the NSE Nifty climbed above the 20,300 mark, driven by robust buying across banking, IT, and metal stocks. Market breadth was positive, with mid-cap and small-cap indices also seeing healthy gains.
Banking and financial services stocks led the rally, as lower interest rate expectations generally translate into improved credit growth prospects and reduced cost of capital for businesses. Shares of HDFC Bank, ICICI Bank, and Axis Bank rose sharply. IT stocks like Infosys and TCS also gained as the prospect of rate cuts could spur global tech spending, a key driver of revenue for Indian IT exporters.
On the global front, Wall Street posted strong overnight gains with the Dow Jones, S&P 500, and Nasdaq all closing higher. Asian markets followed suit, with Tokyo, Hong Kong, and Seoul all trading in the green. European markets are also expected to open on a positive note.
Market analysts remain cautiously optimistic. “The key trigger today is global sentiment driven by hopes of a Fed rate cut. Domestic fundamentals remain supportive, with strong GST collections, robust PMI data, and moderating inflation adding confidence to the rally,” said a senior market strategist.
Foreign portfolio investors (FPIs), who have been net sellers in previous weeks due to rising bond yields, turned net buyers in the past few sessions, further boosting investor morale.
However, experts also warned that volatility could resurface if the Fed takes a more hawkish tone than expected. “If the Fed delays rate cuts or signals prolonged tightening, it could reverse some of these gains. Investors should remain selective and focus on fundamentally strong stocks,” said another analyst.
In commodities, crude oil prices edged lower, which is seen as a positive for India’s trade deficit and inflation outlook. The rupee also strengthened marginally against the U.S. dollar, reflecting improved risk sentiment.
With the market now pricing in at least one rate cut before the end of the year, all eyes remain on U.S. economic data releases later this week, including core inflation and retail sales numbers, which could offer further cues for global equities.
Summary:
Indian stock markets surged as Sensex and Nifty tracked global rallies, fueled by hopes of a U.S. Fed rate cut. Banking, IT, and metal stocks led the gains amid improving domestic fundamentals.