Dalal Street Set to Explode: Nifty Eyes Fresh All-Time High as Rate-Cut Fever Sweeps the Markets

Image taken from The Economic Times

India’s equity markets are gearing up for a powerful start on Thursday, with benchmark indices expected to break into uncharted territory as global and domestic rate-cut expectations hit fever pitch. Early indications from Gift Nifty futures — trading at 26,436 as of 07:38 a.m. IST — suggest the Nifty 50 is likely to open well above Wednesday’s close of 26,205.3, clearing its previous record of 26,277.35 with ease.

Both the Nifty 50 and Sensex last touched record levels in September 2024, but their performance in 2025 has lagged behind other Asian and emerging peers. A combination of muted earnings, stretched valuations, trade tensions, and geopolitical overhangs fueled persistent foreign outflows earlier this year.

Now, the tide appears to be turning. Corporate earnings have begun to firm up, valuations have cooled, tax and rate cut hopes have resurfaced, and domestic inflows remain rock-solid. Foreign selling — once a major pressure point — is finally losing steam. This shift powered the Nifty to its best session in five months on Wednesday, ending at a 14-month high amid surging confidence in a December U.S. Federal Reserve rate cut and optimism ahead of a potential RBI easing next week.

Asia echoed the upbeat sentiment, with regional markets rising 0.4% at open, adding to a 3% rally over three sessions as traders bet big on U.S. policy easing. Lower U.S. rates typically push foreign investors toward emerging markets like India and boost global demand — especially for sectors such as information technology.

Foreign portfolio investors snapped up Indian equities worth ₹47.78 billion on Wednesday — the highest in a month — while domestic institutional investors added another ₹62.48 billion, according to NSE provisional data.

Meanwhile, Brent crude hovered near $63 per barrel after dipping to a one-month low in the previous session. Talks of a potential Russia-Ukraine peace agreement and lingering oversupply concerns kept prices soft — a welcome relief for oil marketing firms, paint companies, cement producers, and airlines, all of whom benefit from cheaper crude.