Sensex Rises 400 Points, Nifty Crosses 25,100 as US Fed Rate Cut Bets Fuel Rally

India’s benchmark indices, the Sensex and Nifty, gained sharply on Friday, September 12, 2025, tracking firm global cues and rising optimism over a potential interest rate cut by the US Federal Reserve. Softer US jobs data released earlier reinforced investor expectations that the Federal Reserve will ease rates at its upcoming September 17 meeting.

At around 11:40 a.m., the Sensex advanced 434.49 points, or 0.53 percent, to 81,983.22, while the Nifty climbed 132.70 points, or 0.53 percent, to 25,138.20. The rise took the Nifty above the 25,100 mark for the first time since August 21, providing a strong technical boost to market sentiment.

Infosys Leads with Share Buyback Boost

Among the Sensex constituents, Infosys was one of the top gainers, rising up to 2 percent. The move followed the company’s announcement of its largest-ever share buyback programme worth ₹18,000 crore, which investors welcomed.

Other major contributors to the rally included Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Axis Bank, and Larsen & Toubro, all of which supported the index’s upward momentum.

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Key Drivers of the Market Rally

The surge in the equity markets was underpinned by a combination of domestic and global factors. Analysts pointed to five major triggers behind Friday’s gains:

1. US Federal Reserve Rate Cut Hopes

The biggest factor fueling the rally was optimism around a potential interest rate cut by the US Federal Reserve. Softer US jobs data increased the likelihood of a 25 basis point cut when the Fed meets on September 17.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted the global sentiment:

“Globally stock markets are resilient, drawing strength from the new records being set by the mother market US. The US market is bullish on expectations of a rate cut from the Fed on September 17. A 25 bp rate cut by the Fed is the near consensus now.”

Lower US interest rates typically improve global liquidity and risk appetite, benefiting emerging markets such as India.

2. Strong Global Cues

Markets across Asia and the US provided a positive backdrop. South Korea’s Kospi, Japan’s Nikkei 225, Shanghai Composite, and Hong Kong’s Hang Seng all traded higher.

On Wall Street, US markets ended in positive territory on Thursday, reinforcing the global bullish mood and giving Indian equities additional momentum.

3. GST Cuts Continue to Support Sentiment

The GST Council’s decision to cut taxes on nearly 400 product categories, which together account for around 16 percent of the consumer-price basket, remained a tailwind for the market.

This move has especially benefited consumer goods companies and automakers, both of which continued to see sustained buying interest.

4. Decline in Crude Oil Prices

Global oil prices also aided investor sentiment. Brent crude futures fell 0.87 percent to USD 65.79 per barrel.

Lower crude oil prices help reduce inflationary pressures and improve corporate profit margins, particularly for sectors dependent on energy and fuel costs.

5. India VIX Fall Signals Stability

Investor confidence was further reinforced by a decline in market volatility. The India VIX fell 1.35 percent to 10.22, indicating lower investor fear and expectations of a stable near-term trading environment.

Market Breadth and Sectoral Performance

Market breadth was positive with 2,012 shares advancing, 1,498 declining, and 155 remaining unchanged on the BSE.

Barring FMCG and PSU Bank, all major sectoral indices traded in the green. Among the gainers:

• Realty, IT, and Metal stocks led the uptrend.

• The Nifty Smallcap100 and Nifty Midcap100 indices added up to 0.4 percent.

• The IT index rose 0.4 percent, supported by the rally in Infosys.

• The metal index gained 0.78 percent.

• The realty index advanced 0.4 percent.

This broad-based participation reflected underlying market strength.

Technical View: Key Levels to Watch

Anand James, Chief Market Strategist at Geojit Financial Services, shared a technical outlook on the Nifty:

• Nifty faces resistance near 25,012.

• Upsides remain towards 25,400 if momentum sustains.

• However, the approach of 25,100 could attract rejection trades.

• A fall below 24,700 could delay the positive momentum.

This suggests that while the overall sentiment is bullish, traders should be cautious around resistance zones and prepare for possible pullbacks.

Summary of Market Action

• Sensex: Gained 434.49 points (0.53%) to close at 81,983.22.

• Nifty: Gained 132.70 points (0.53%) to settle at 25,138.20, reclaiming the 25,100 mark after three weeks.

• Top movers: Infosys (+2% after ₹18,000 crore buyback), Tata Motors, Maruti, M&M, Axis Bank, L&T.

• Global cues: Positive across Asia and the US.

• Key triggers: Fed rate cut bets, GST cuts, falling crude prices, easing volatility.

• Technical view: Resistance near 25,012; support at 24,700; upside potential to 25,400.

Conclusion

The sharp rally in Indian equities on September 12 was driven by global optimism over an imminent US Fed rate cut, supportive domestic policy measures like GST cuts, falling crude prices, and stable volatility levels.

With the Nifty crossing the 25,100 mark for the first time since August 21, investors regained confidence in the market’s short-term direction. However, analysts caution that technical resistance levels and profit-booking at higher levels may lead to volatility in the coming sessions.

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