Indian Shares Slip as Fed’s Cautious Rate Cut and Trade Talks Weigh on Sentiment
India’s benchmark equity indices edged lower on Thursday, tracking cautious global sentiment after the U.S. Federal Reserve cut interest rates by 25 basis points but hinted at no further reductions this year. The Nifty 50 declined 0.45% to 25,935.9, while the BSE Sensex slipped 0.44% to 84,626.81 as of 9:41 a.m. IST. The benchmarks had gained about 0.5% in the previous session, remaining less than 1% shy of their record highs from September 2024.
Fed Chair Jerome Powell signaled that the latest rate cut could be the last for 2025 due to limited economic data amid the ongoing U.S. government shutdown. Analysts cautioned that the Fed’s measured stance could spur short-term volatility in equities, with bond yields possibly inching higher. Meanwhile, U.S. President Donald Trump and Chinese President Xi Jinping met at a South Korean air base, expressing optimism about easing trade tensions between the two largest economies.
Back home, all 16 major sectoral indexes traded lower, led by pharmaceuticals, which dropped 1.1%. Dr. Reddy’s Laboratories tumbled 4.5% after receiving a non-compliance notice from Canada’s Pharmaceutical Drugs Directorate for its semaglutide injection, a setback that could delay its planned January launch. In contrast, infrastructure giant Larsen & Toubro surged 2.2% to a record high following robust quarterly earnings and an upbeat order outlook.
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