Global Rate Cut Hopes Supercharge Optimism in Stock Market

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Nifty Sets Eyes on 25200 with Bullish technical Chart: Angel Broking

By S Jha

Mumbai, May 16, 2025 – The Indian equity markets delivered a stellar performance on Thursday. The benchmark Nifty index breached the 25,000 milestone for the first time this year, closing at 25,060 after a robust gain of 1.60%.

Angel Broking in a note to clients highlighted the impressive rally, which came after a choppy start, with bullish momentum surging in the latter half of the trading session.

The Sensex and Nifty’s ascent was broad-based, with all sectoral indices closing in the green. Strong performances were seen in auto, realty, metal, infrastructure, and consumption sectors.

According to Angel Broking, the Nifty jumped 395 points, confirming a bullish breakout on the daily chart. “Futures OI surged over 12% with volumes well above the 10-day average, reflecting strong long-side participation,” the firm noted.

The market breadth remained firm, with 90% of Nifty 50 and 83% of Nifty 500 stocks trading above their 50-day Exponential Moving Average (EMA), indicating underlying strength.

“Technically, the outlook is positive. The support levels are expected around 25,000-24,800 and a sacrosanct base at 24,500-24,400. Resistance is projected at 25,200-25,300, where fresh long positions could emerge if breached,” added the brokerage firm.

Sectorally, auto stocks were particularly notable, with nearly all companies in the sector scaling significant gains. Realty, metal, infrastructure, and consumption sectors each advanced over 1.5%, underscoring the broad-based buying activity.

Angel Broking’s report emphasized that 49 out of 50 Nifty stocks ended in the green, while 375 of the Nifty 500 advanced, highlighting widespread investor confidence beyond just heavyweight support.

Global Market Dynamics and Rate Cut Expectations

The rally in Indian markets occurred despite muted activity in US markets overnight and red closures or trading in Asian and European bourses. However, optimism persists globally, fueled by hopes of a Federal Reserve rate cut later this year.

Equity market experts in the US are hoping for early rate cuts from the Fed. The Fed’s March 2025 meeting maintained interest rates at 4.25%-4.50% but projected two cuts.

The bullish sentiment was expressed by @MarketMaven456 in a post on X, as it said: “Indian markets are decoupling from global headwinds, but a Fed rate cut could supercharge the rally. The Nifty’s breakout aligns with global liquidity hopes.”

The hope for a rate cut is also tied to the Federal Reserve’s calibration of policy to manage inflation, as reported by US Bank. “With markets in flux, a rate cut could ease borrowing costs and spur investment globally, including in emerging markets like India,” the bank’s analysis suggested.

(Disclaimer: This article makes no recommendation for any kind of trades in the stock market)

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