Fed Rate Cut Hopes Lift Metal and Realty Stocks Amid Strong Global Demand

Metal and Realty Shares Rally on Fed Rate Cut Hopes and Strong Global Demand Outlook

Indian equity markets witnessed renewed buying interest in metal and realty shares on October 27, driven by rising optimism over a potential US Federal Reserve rate cut and sustained global demand recovery. The softer-than-expected US inflation print boosted investor sentiment, reinforcing expectations that the Federal Reserve could reduce interest rates during its upcoming October 28–29 policy meeting.

This positive momentum propelled both Nifty Metal and Nifty Realty indices higher, marking continued strength across rate-sensitive and globally linked sectors.

Nifty Realty Extends Gains for Third Straight Session

The Nifty Realty index climbed 1.5%, extending its winning streak for the third consecutive session. Out of the 10 constituents in the index, nine traded in the green, reflecting broad-based optimism in the real estate sector.

Leading the rally were Brigade Enterprises, Sobha, Godrej Properties, and Prestige Estates Projects, which surged up to 3%. Analysts noted that lower borrowing costs, typically resulting from rate cuts, tend to stimulate housing demand and boost developer margins, making the sector an attractive bet for investors.

“Real estate has seen a steady revival post-pandemic, and the potential rate cut by the Fed adds to the liquidity comfort. Developers could benefit from lower funding costs, while buyers get easier credit access,” said a Mumbai-based real estate analyst.

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Metal Stocks Shine as Hopes Rise for Policy Easing and Stronger Demand

The Nifty Metal index also registered gains for the fourth consecutive session, supported by expectations of global policy easing and rising industrial demand.

Stocks such as Welspun Corp, Hindustan Copper, Jindal Steel, Hindalco Industries, and Tata Steel advanced up to 5%, as investors bet on higher demand for metals amid strengthening global growth indicators.

Adding to the momentum, copper prices — a bellwether for industrial activity — hovered near a 16-year high, signaling robust consumption in key economies.

“Metals are seeing a dual tailwind — global policy support and a potential demand pickup from China and the US. If the Fed cuts rates and the RBI follows, it could further ease cost pressures for Indian manufacturers,” said Rohit Srivastava, Head of Research at a domestic brokerage.

Fed Rate Cut Expectations Fuel Market Optimism

Market experts highlighted that the recent rally in equities, especially in interest rate-sensitive sectors, stems from expectations of a 25-basis-point (bps) rate cut by the US Federal Reserve.

“Markets have largely priced in a 25 bps reduction, but the key focus will be on the Fed’s forward guidance for the coming months,” said analysts at Nomura in a research note.

Several global brokerage houses, including Capital Economics and MUFG, have indicated that further rate cuts could follow in the next few policy meetings as central banks aim to sustain growth amid moderating inflation trends.

Back home, expectations are also building that the Reserve Bank of India (RBI) may consider reducing key policy rates during its December monetary policy review. Some economists even project a possible repo rate of 5% by February 2026 if inflation remains under control.

Prospects of US-China Trade Progress Boost Sentiment

Adding another layer of optimism, reports of progress in US-China trade relations lifted market sentiment globally. Iron ore futures surged to their highest level in nearly two weeks, as traders priced in hopes of easing trade tensions between the world’s two largest economies.

The easing of trade restrictions is seen as a potential boost for metal exporters, particularly in India, where companies like Tata Steel and JSW Steel have significant exposure to global markets.

“Global trade thawing and steady commodity demand present a bullish setup for metal stocks. If the Fed confirms a dovish stance, we may see another leg up in cyclical sectors,” said Karthik Iyer, a senior analyst at a leading investment firm.

Analysts See Broader Upside if Rate Cut Narrative Holds

Market watchers believe that a sustained narrative around rate cuts could keep realty and metal sectors buoyant in the near term. Lower interest rates are expected to reduce financing costs, stimulate infrastructure investments, and revive industrial activity, all of which are positive for both sectors.

However, some caution remains as traders await Fed Chair Jerome Powell’s commentary on the rate trajectory. Any hint of a more gradual approach to easing could temper near-term enthusiasm.

“While the market has factored in a rate cut, what’s crucial is whether the Fed signals a clear pivot. If so, we could see a broader risk-on rally in emerging markets, including India,” said Neha Shah, economist at Capital Economics.

Conclusion: Optimism Builds Ahead of Fed Decision

As investors await the Fed’s policy announcement, Indian markets continue to ride the wave of global optimism. The rally in metal and realty shares underscores the market’s conviction that monetary easing and improving trade dynamics will support growth in the months ahead.

With both sectors positioned to benefit from lower interest rates and stronger global demand, analysts expect the Nifty Metal and Realty indices to remain on firm footing, even as traders stay watchful for cues from global central banks.