Thu Sep 19 05:33:06 UTC 2024: ## US Fed’s Historic Rate Cut Sends Shockwaves Through Indian Markets

**New Delhi, India – September 19, 2023** – The US Federal Reserve’s surprise 50 basis point rate cut, the largest in over four years, has sent ripples through Indian markets, sparking a mixed reaction among investors and experts. While some see it as a positive catalyst for Indian equities, others express concerns about potential economic slowdown in the US.

The rate cut, seen as a sign of the Fed’s concern about the US economy, initially sent Gift Nifty futures on NSEIX soaring nearly 120 points before partially paring gains. Similarly, US-listed ADRs of Indian IT giants Infosys and Wipro also experienced an initial surge, but ultimately ended up trading down by as much as 1.8 percent.

Despite the initial volatility, experts remain cautiously optimistic about the longer-term impact on Indian equities. Nilesh Shah, MD of Kotak Mahindra AMC, believes the rate cut will attract foreign investments to emerging markets, with a weaker dollar and lower rates.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, sees the move as a “booster” for emerging markets, particularly those with tight banking system liquidity like India. He expects the IT sector to benefit significantly, as a stronger US economy would translate into positive growth for Indian IT companies.

However, Ajit Mishra, Senior Vice President of Research at Religare Broking, voices concerns about the implications of such an aggressive rate cut. He believes a 50 bps cut could signal an economic slowdown in the US, leading to negative market reactions. He also cautions against investing in public sector units (PSUs) due to their high valuations.

Despite the mixed reactions, there’s a general consensus among experts that the Indian IT sector stands to benefit from the rate cut. However, the overall impact on the Indian stock market remains unclear, with experts closely monitoring global economic data and future Fed actions.

**Note:** This news article is based on the information provided in the original text and does not reflect personal opinions or financial advice.

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