By Samannay Biswas

Copyright timesnownews

The Indian stock market surged on Thursday, September 18, 2025, with the benchmark Sensex climbing 410 points to 83,059 and the Nifty crossing 25,400 amid strong global cues after the US Federal Reserve announced a rate cut. IT and Banking Drive Market Gains The rally was led by IT and banking stocks, which gained momentum as investors priced in the Fed’s dovish stance. The BSE IT index rose 1.5%, with Tech Mahindra, TCS, Wipro, Infosys, and LTIMindtree among the top gainers. Banking heavyweights such as ICICI Bank and Bajaj Finserv also supported the uptrend. Midcap and smallcap indices traded with marginal gains, while the metal index was the only sector in the red. Key Market Highlights Nifty closed above 25,400, up 90 points.Sensex surged 410 points to 83,059.Top gainers: Tech Mahindra, ICICI Bank, TCS, Bajaj Finserv, Trent.Losers: Hindalco, Bajaj Finance, Apollo Hospitals, SBI, SBI Life Insurance. Global Cues: Fed Cuts Rates The US Federal Reserve cut its benchmark rate by 25 basis points to 4-4.25%, marking the first reduction of the year. The move is expected to boost consumer spending and equity markets worldwide. Analysts believe the decision will also attract foreign capital inflows into India, strengthening the rupee and supporting equity benchmarks. Big Corporate Moves KPI Green Energy launched India’s first externally credit-enhanced green bond worth ₹670 crore, listed on the NSE.Dixon Technologies announced the acquisition of a 51% stake in Kunshan Q Tech for ₹553 crore, strengthening its position in mobile and automotive components.Biocon Biologics received USFDA approval for osteoporosis and cancer biosimilars, a move expected to boost its international portfolio.IRM Energy extended its winning streak, jumping 8% to ₹356.55.Saregama India gained 2.9% on strong volumes, marking its best rally in two months. Rajesh Palviya, SVP – Research at Axis Securities, said: “The Fed’s rate cut, combined with India’s domestic factors like GST rate rationalisation and RBI’s earlier cuts, has created a strong environment for growth. BFSI, IT, FMCG, and auto sectors look well positioned.” Why the Fed Is Cutting Rates The expected reduction comes amid a combination of sticky inflation, weak labor market data, and political pressure from US President Donald Trump for deeper cuts. Powell had hinted at possible “policy adjustments” during his Jackson Hole speech on August 22, citing a changing risk balance with inflation still elevated and employment under strain. US Jobs Market: The economy added only 22,000 jobs in August, down from 79,000 in July. Revisions show 9,11,000 fewer jobs in the year to March than previously estimated.Unemployment: The jobless rate rose to 4.3% in August from 4.2% in July.Inflation: US Consumer Price Index (CPI) rose 2.9% in August, while the Fed’s preferred inflation gauge, the PCE index, remained steady at 2.6% in July.Given this backdrop, experts expect the Fed to pursue a gradual easing cycle, with total cuts of 50–75 bps by year-end. Trump’s Pressure on the Fed Trump has consistently pushed for aggressive rate cuts to counter the economic drag from his own tariff policies and immigration curbs. His influence appears to be growing: the Senate confirmed Trump’s top economic adviser, Stephen Miran, to the Fed’s Board of Governors this week. Analysts say this adds a layer of political pressure on Powell and the Fed’s decision-making. Impact on Indian Stock Markets For India, the implications hinge less on the size of the immediate cut and more on Powell’s tone: 25 bps Cut Already Priced In: Analysts believe Indian equities have largely discounted a small cut.Larger Cuts Could Spark Inflows: A cumulative 50–75 bps reduction could renew foreign portfolio inflows (FPI), reversing the outflows seen since July.Rupee and Inflation Relief: Lower US rates tend to strengthen emerging market currencies, including the Indian rupee, reducing imported inflation and giving the RBI more policy flexibility. G. Chokkalingam, founder and head of research at Equinomics Research, noted, “A 25 bps cut won’t boost the Indian stock market much. A cumulative 50 bps or bigger cut will be positive. Powell’s commentary on growth and inflation will be on the radar.” Subho Moulik, founder and CEO of Appreciate, added, “Markets expect an additional 75 bps of cuts by late 2025. If delivered, this could strengthen foreign inflows into India, benefiting equities and the rupee.” Trade Negotiations in Focus Beyond Fed policy, Indian markets are also watching the progress of India–US trade negotiations and talks on a free trade agreement (FTA) with the European Union. Both could provide long-term support to Indian equities. The 14th round of India–EU FTA discussions is set for October. A 25 bps Fed rate cut is almost certain, but the real trigger for Indian equities will be Powell’s guidance on future policy moves and inflation risks. A more dovish Fed stance could set the stage for renewed foreign investor confidence in Indian markets, complementing domestic drivers like reforms, strong monsoons, and an earnings revival. Get Latest News live on Times Now along with Breaking News and Top Headlines from Business, Companies and around the world.