Sensex, Nifty rise on Fed rate cut hopes; tariff jitters curb broader rally

The domestic equity benchmarks closed higher on Monday, led by a rally in IT stocks after U.S. Federal Reserve Chair Jerome Powell signaled that rate cuts could begin as early as September. Speaking at the Jackson Hole symposium on Friday, Powell noted rising risks to the U.S. labor market even as inflation pressures persisted, sparking hopes of easier monetary policy.

Lower U.S. borrowing costs typically boost appetite for emerging-market assets, with India among the key beneficiaries. However, investor sentiment remained cautious ahead of fresh U.S. tariffs on Indian goods. President Donald Trump?s additional 25% levy, set to take effect on August 27, could raise duties as high as 50%.

While large-cap IT stocks drove the day?s gains, mid- and small-cap shares gave up early advances, reflecting concerns over domestic demand headwinds. The Nifty 50 managed to hold above the 24,950 level at close, marking a steady start to the week.

The S&P BSE Sensex advanced 329.06 points or 0.40% to 81,635.91. The Nifty 50 index rose 97.65 points or 0.39% to 24,967.75.

Infosys (up 3.03%), TCS (up 2.85%) and HCL Technologies (up 2.6%) were major Nifty movers.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index added 0.10% and the S&P BSE Small-Cap index shed 0.02%.

The market breadth was negative. On the BSE, 1,948 shares rose and 2,237 shares fell. A total of 210 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, shed 0.25% to 11.76.

Economy:

Fitch Ratings has affirmed India?s Long-Term Foreign-Currency Issuer Default Rating at ?BBB-? with a Stable Outlook. While upcoming U.S. tariffs pose a moderate downside risk, Fitch notes the situation remains uncertain. The Trump administration plans to impose a 50% tariff on Indian goods starting August 27.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.49% to 6.581 from the previous close of 6.574.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 87.5800 compared with its close of 87.5250 during the previous trading session.

MCX Gold futures for 3 October 2025 settlement added 0.12% to Rs 100,502.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.28% to 97.99.

The United States 10-year bond yield rose 0.35% to 4.275.

In the commodities market, Brent crude for October 2025 settlement gained 43 cents or 0.63% to $68.16 a barrel.

Global Markets:

Most Europe shares traded lower on Monday as investors awaited for the release of key inflation data from France, Germany, Italy and other key European countries on Friday. Market participants are also eyeing key earnings announcement from Europe and beyond, with drinks maker Pernod Ricard and tech giant Nvidia among the companies scheduled to report.

Asian shares ended higher after Federal Reserve Chair Jerome Powell signaled that the central bank could begin easing monetary policy next month.

These comments were made by the US Fed Chair at his widely anticipated annual speech in Jackson Hole, Wyoming.

In a tepid speech at the central bank?s annual conclave in Jackson Hole, Wyo., Powell said that ?the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.?

The Fed chief added that the balance of risks appear to be shifting? between the central bank?s dual mandate of full employment and stable prices. He cited ?sweeping changes? in tax, trade and immigration policies.

On Friday, the Dow Jones Industrial Average rallied to an all-time high Friday after Federal Reserve Chair Jerome Powell signaled the central bank could begin easing monetary policy next month.

The Dow climbed 1.89%, reaching a fresh high and closing at a record level of 45,631.74. The S&P 500 rose 1.52%. At its session high, the broad market index came within three points of its record. The Nasdaq Composite gained 1.88%.

Stocks in Spotlight:

Paper stocks were in demand on Friday after the government imposed a Minimum Import Price (MIP) on virgin multi-layer paper board (VPB), a move aimed at supporting domestic manufacturers.

Emami Paper Mills jumped 20%, JK Paper surged 17.24%, Tamil Nadu Newsprint & Papers gained 10.9%, West Coast Paper Mills spurted 11.9%, while Andhra Paper rose 10.48% and Seshasayee Paper climbed 5.5%. NR Agarwal Industries was up 5%.

The Directorate General of Foreign Trade (DGFT), through a notification dated 22 August, amended the import policy for certain paper and paperboard categories, fixing the MIP at Rs 67,220 per metric tonne on a cost, insurance, and freight (CIF) basis till 31 March 2026. The MIP applies under ITC (HS) Codes 48059100, 48059200, 48059300, 48109200 and 48109900. Imports will continue to require registration under the Paper Import Monitoring System (PIMS), while stock lot imports remain prohibited.

Mazagon Dock Shipbuilders advanced 2.06% after reports said the Ministry of Defence had authorised the company to start cost negotiations with Germany?s Thyssenkrupp for the Rs 70,000-crore P-75(I) submarine project.

Bajaj Auto rose 0.9%. The company said that the supplies of its electric scooter, Chetak, have resumed across all dealerships, after overcoming constraints caused by global rare earth magnet availability. The company has managed to restore production ahead of schedule and production and shipments recommenced as of August 20.

Cohance Lifesciences rose 1.52% to Rs 898.15 after a foreign broker initiated coverage on the stock with a buy call and a price target of Rs 1,150.

Signpost India added 1.01% after the company has secured the exclusive advertising rights for all the 67 key metro stations operated by Bangalore Metro Rail Project (BMRCL), with an expected revenue potential of Rs 600 to Rs 700 crore. The contract will remain in effect for nine years, until 2034.

Yes Bank rose 1.40% after the Reserve Bank of India approved Sumitomo Mitsui Banking Corporation's plan to acquire up to 24.99% stake and voting rights in the lender. The Japanese banking giant had earlier proposed a 20% acquisition, including a 13.19% stake purchase from State Bank of India and 6.81% from seven other shareholders such as Axis Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank, and IDFC First Bank.

Coal India gained 1.51% after the company signed a non-binding memorandum of understanding (MoU) with the Government of Madhya Pradesh (through the Directorate of Geology and Mining) and the Madhya Pradesh State Mining Corporation.

Godrej Properties rose 1.35% after the company announced sales of over Rs 1,000 crore at its newly launched Godrej Regal Pavilion in Rajendra Nagar, Hyderabad. The project sold 683 homes spanning 1.2 million sq ft since its August 2025 launch. With a total development potential of 4.14 million sq ft and revenue potential of Rs 3,600 crore.

Interarch Building Solutions advanced 1% after the company secured an order worth approximately Rs 90 crore from Rungta Mines.

JNK India added 2.07% after the company announced that it has secured significant order from its promoter entity, JNK Global Co., Korea.

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