Indian Markets Set For Year-End Upswing, Thanks To Fed Rate Cut: Ajay Bagga

The Fed cut rates, delivered a dovish commentary and added asset purchases of $ 40 bn with promises of more liquidity injections. Even though the rate cut decision was split 9-3, the markets welcomed the lack of hawkishness with stocks rallying, bond yields falling and the US dollar weakening.

Sentimentally Positive Day For Global Markets

The Dot Plot shows 1 rate cut each in 2026 and 2027, however markets are factoring in two rate cuts. There was relief of Chairman Powell's statement that the Fed viewed inflation as a one off due to the tariffs impact. The Dot Plot duly reduced the inflation number for 2026 and increased the GDP number.

Overall a sentimentally positive day for global markets.

RBI Move, Fed Decision, GST Rate Revision: Triple Bonanza for Indian Markets

Indian market futures were up over 100 points during the post Fed recovery in markets and this morning in Asia. Those gains have halved for now, just before the markets open.

Overall with positive outcomes from the RBI and the US Fed, Indian markets are well positioned for a year end upswing. Expectations are low from the present visit of a US Trade negotiation delegation.

However, earnings should rebound in the December quarter on the back of a strong consumption impulse post the GST cuts of end September. Coupled with expectations from the Union Budget 2026, that is a strong setup. 

What is holding back the markets is continued FPI selling and massive primary market and OFS offerings which are diverting liquidity from secondary markets. Positive open ahead, hopefully there is a positive follow through as well.

Also Read: Ajay Bagga Sees Volatility Ahead as Global Cues, Fed Decision and Big Tech Earnings Steer Indian Markets