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Indian Equity Markets Rise on Positive Asian Cues as Soft U.S. Inflation Fuels Fed Easing Hopes

Markets

Business Honor
19 December, 2025

Nifty and Sensex post gains; pharma, IT stocks lead the charge as foreign investors turn net buyers, buoyed by expectations of Fed rate cuts.

Indian equity markets opened higher on Friday, mirroring positive cues from broader Asian markets after softer-than-expected U.S. inflation data strengthened expectations of monetary easing by the Federal Reserve in 2025. At 9:59 am IST, the key Nifty 50 index was up 0.6% at 25,959.2, while the BSE Sensex moved 0.6% higher to 84,978.05. The buying was across the board, with all 16 main sectoral indices in the green. The broader markets were also in on the act, with mid-cap stocks rising 0.5% and small-cap stocks gaining 0.7% each.

Asian markets rose by about 0.6% as easing U.S. inflationary pressures lifted sentiment. The country's U.S. consumer prices rose 2.7% year-on-year in November, well below forecasts of a 3.1% increase. The data solidified expectations of possible U.S. Federal Reserve interest rate cuts next year. Meanwhile, the Bank of Japan raised interest rates to levels not seen in nearly three decades, a move widely expected by investors. Market experts said lower US interest rates may trigger stronger foreign fund inflows into Indian equities, helping the rupee and overall market liquidity. The sentiment also got a boost with foreign portfolio investors turning net buyers after heavy selling in the first week of this month. Provisional data showed FPIs bought Indian equities worth Rs 5.96 billion on Thursday, marking their second session of net purchases.

Among sectoral gainers, pharmaceutical stocks rose 1.3%, driven by expectations that the proposed U.S. Biosecure Act may lead to faster efforts by global pharma companies toward supply chain diversification away from China, thereby benefiting Indian CDMOs. Financial stocks and IT shares also recorded decent gains of 0.4% and 0.5%, respectively. In stock-specific action, ICICI Prudential Asset Management made a strong debut, listing at a 20.1% premium after its $1.2 billion IPO. GPT Infraprojects jumped 6% after its joint venture bagged an infrastructure contract worth 18.04 billion rupees.