Mumbai: Indian equities are set to open higher on Monday after US Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole Symposium boosted global sentiment. Nifty futures traded at 24,995, up 0.4% or 80 points, signaling a positive start for Dalal Street.
Powell’s Message at Jackson Hole
At the annual central banking summit, Powell acknowledged a “shifting balance of risks” in the US economy, pointing to labour market stress while warning that inflation risks remain elevated—partly due to tariffs imposed by the US administration.
Despite cautionary notes, investors interpreted his comments as a signal of possible rate cuts. Markets are now factoring in a 25 basis point cut at the Fed’s September 16–17 meeting.
US equities rallied broadly on Friday, while the dollar weakened as traders priced in the shift.
Implications for India
For Indian markets, Powell’s tone could support short-term sentiment and attract inflows into risk-sensitive sectors. Market strategist Ajay Bagga said the Fed’s signal has raised expectations considerably: “The bar is extremely high now for the Fed to leave rates unchanged in less than a month. Investors should align allocations towards quality cyclicals, duration, and select commodities, while keeping an eye on jobs and inflation data.”
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, also noted that the prospect of a September rate cut is “positive for Indian equities in the near term.”
The FII Factor
Foreign institutional investors (FIIs) remain a key challenge. Through August, FIIs have sold ₹25,564 crore worth of shares, bringing total equity outflows this year to ₹1,57,440 crore. Bond exposure has also been trimmed. Analysts say expensive valuations compared to peers remain a sticking point, though a weaker dollar could slow outflows.
Key Drivers Ahead
In the coming weeks, three factors will guide market direction:
- The Fed’s September policy decision.
- The trajectory of FII flows.
- The outcome of a possible US–India trade deal, with an August 27 deadline approaching.
Technical Outlook
On the charts, Nifty has support at 24,800, with resistance near 25,150. Analysts expect consolidation unless the index clears 25,150 decisively. Traders are advised to follow a “sell on rise” strategy, with 25,000 (upside) and 24,800 (downside) as key levels to watch.
Bank Nifty is showing a similar structure, holding support at 55,000. A move below this level could trigger further downside, while recovery above 56,150 would negate the bearish bias.
Image Source: Google | Image Credit: Respective Owner
