Indian Equities Rise on Fed Hints of Possible Rate Cut

Indian equity markets are expected to open higher on Friday after dovish remarks from Federal Reserve Governor Christopher Waller reduced expectations for a possible rate increase this month.

A weakening USD and declining U.S. bond yields provide support, but heightened volatility persists amid Brent crude trading near $96 per barrel — driven by concerns over potential disruptions to crude oil shipments through the Strait of Hormuz.

On Thursday, benchmark indices such as the Sensex and Nifty narrowed slightly, ending lower by approximately 0.5% and 0.2%, respectively.

The rupee surged 49 paise to close at 94.48 per dollar, setting a five‑session winning peak and reaching a two‑and‑a‑half‑month high after Indian banks leveraged a record $136.38 billion in special RBI foreign‑exchange schemes.

Foreign institutional investors exited the market by selling roughly Rs. 2,345.87 crore in shares on Thursday, whereas domestic institutional buyers added about Rs. 4,977.46 crore, per provisional exchange data.

Asian markets followed Wall Street to the upside this morning, while the U.S. dollar remained flat and gold drifted above $4,480 an ounce ahead of the critical U.S. jobs report.

Brent crude futures lingered near $96 a barrel, having risen nearly 9% this week as worries grow over potential supply shocks in the Middle East.

Iran reported conducting a second consecutive day’s retaliatory strikes against U.S. forces in Kuwait and the United Arab Emirates, while President Donald Trump warned that Washington could strike Iran “at any moment”.

Vie President Mohammad Reza Aref announced Iran will respond to any future U.S. assaults with an asymmetric, multi‑layered strategy, cautioning that “dark times lie ahead for the American economy.”

Prime Minister Benjamin Netanyahu declared overthrowing Iran’s regime has become a central goal for Israel and is within striking distance.

U.S. equities rallied overnight as bond yields slipped following Governor Christopher Waller’s argument that rates would remain steady at the next meetings.

Economically, jobless claims posted only slight gains last week despite modest layoffs, indicating a resilient labor market; meanwhile, services‑sector growth spiked in August, yet rising input costs signal heightened inflationary pressures.

Geopolitics also intensified as Vice President JD Vance dismissed dialogue with Iran pending a cessation of attacks on commercial shipping in the Strait of Hormuz, noting that all options remain available.

Market indices moved positively, with the Dow gaining 1.2%, the tech‑heavy Nasdaq Composite rising 1.4% and the S&P 500 advancing 1.1%.

European equities finished higher on Thursday after three consecutive days of declines.

The STOXX 600 gained half a percent as a broad bond sell‑off eased and final PMI data confirmed Eurozone activity continued its stronger trend in August.

National indices rose as well, with Germany’s DAX climbing 0.6%, France’s CAC 40 ticking up 0.1% and the UK’s FTSE 100 gaining 0.7%.

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