Sensex, Nifty rise on hopes of Fed rate pause, China stimulus

The Sensex and the Nifty rose on Monday, tracking gains in global markets on hopes that the US Federal Reserve may pause its interest rate hikes in the near future. The Sensex rose 237.42 points, or 0.42%, to close at 54,529.35, while the Nifty gained 62.10 points, or 0.47%, to close at 16,278.50.

The gains were broad-based, with all the 13 sectoral indices ending in the green. The metal index rose the most, by 2.28%, followed by the IT index, which rose 2.06%.

US Federal Reserve

The market sentiment was boosted by a report that the US Federal Reserve may pause its interest rate hikes in September. The Fed is expected to raise interest rates by 0.75% in July, but there is growing speculation that it may pause the hikes in September if inflation shows signs of easing.

The market was also supported by news that China is planning to provide more stimulus to its economy. China’s central bank said on Sunday that it will cut the reserve requirement ratio for banks by 0.5 percentage points, effective from July 15. This is the second cut in the reserve requirement ratio this year, and it is expected to boost lending and economic growth in China.

The positive sentiment in the markets is likely to continue in the near term, as investors await more clarity on the pace of interest rate hikes by the Fed and the stimulus measures by China.

Here are some other factors that could influence the markets in the coming days:

• The release of US economic data, such as the jobs report and the inflation report.
• The outcome of the European Central Bank’s meeting on July 21.
• The progress of the Russia-Ukraine war.

Overall, the outlook for the Indian stock markets remains positive in the near term. However, investors should remain cautious and monitor the developments on the global front.