The total market capitalisation of BSE-listed firms ended at Rs 462.3 trillion, with a gain of Rs 2.3 trillion. Foreign portfolio investors bought shares worth Rs 483 crore, while domestic institutional investors also pumped in Rs 1,870 crore.

Powell said on Friday that the time has come for the US Central Bank to cut rates. The Fed chief said that the pace of rate cuts will depend on incoming data. Further, Powell said he was confident that inflation is on a sustainable path to reaching the Fed’s target of 2 per cent.

Though the Fed chief’s comments did not clarify what the US Central Bank will do after the September meeting, it cheered markets. The Fed has held its benchmark rates in the range of 5.25 to 5.5 per cent, its highest levels in more than two decades.

The recent weak data on employment has led to criticism that the Fed’s high rates may push the US economy into recession. Post Powell’s speech, the debate has shifted to the size of the rate cut, with some betting for a 50 basis point cut in September. However, a 50 bps cut would indicate that the US economy is not that resilient.

“Indian equities celebrated the festive day by regaining the 25,000-mark after the US Fed indicated that interest rate cuts are most likely to start from its September meeting. The index is now just inches away from its life high. We expect the momentum to continue towards new highs with broader market participation. This week, the market will focus on India and the US GDP data, derivatives monthly expiry, and other global cues,” said Siddhartha Khemka, head of retail research for Motilal Oswal Financial Services.

The gains in the global markets were capped by escalating tensions in the Middle East after an Israeli attack on Hezbollah’s missile launchers in Lebanon has also made investors nervous. The Brent crude was trading at $80 per barrel, a 1.3 per cent gain on Monday.

“We maintain our optimistic outlook given the favourable global cues and recommend a ‘buy on dips’ strategy. While there has been some selective participation from the banking sector, more decisiveness among major private banks is needed to maintain the momentum. Traders should adjust their positions accordingly, with a focus on stock selection,” said Ajit Mishra, SVP of research at Religare Broking.

Most of the gains in Sensex were driven by HDFC Bank and Reliance Industries. IT firms, which earn a huge chunk of their revenues from the US, also contributed to gains.

First Published: Aug 26 2024 | 6:56 PM IST