At the important annual Jackson Hole Symposium on Friday, US Federal Reserve chair Jerome Powell hinted at possible “policy adjustments” in the coming months while cautioning that inflation risks remain elevated. His dovish undertone lifted Wall Street on Friday, triggering hopes of a September rate cut and putting pressure on the US dollar.
Indian investors are now watching how Dalal Street will respond to Powell’s remarks when trading resumes on Monday.
Market experts believe Powell’s comments have raised expectations of a September rate cut, setting up a likely gap-up start for Indian equities.
“The Indian stock market is poised to open on a positive note, taking cues from Powell’s dovish signal that a rate cut is imminent,” said Sugandha Sachdeva of SS WealthStreet. “By acknowledging the risks to the US job market, Powell opened the door to a policy shift favouring growth and employment.”
VK Vijayakumar of Geojit Investments echoed the view but urged caution: “Powell indicated that risks to unemployment may warrant a rate cut in September, which explains the rise in US stocks and fall in bond yields. But he also flagged upside inflation risks. Indian markets may open firm on Monday, though tariff concerns could weigh more heavily here.”
According to Sachdeva, a softer dollar and buoyant global sentiment could further boost domestic equities. She added that a US Fed cut would give the Reserve Bank of India more room to consider a final 25-basis-point reduction in its upcoming policy review, potentially concluding the current easing cycle.
On the technical front, Shiju Kuthupalakkal of Prabhudas Lilladher noted that the Nifty 50 index had shown signs of weakness last week. “The index formed a bearish candle with a lower top, suggesting a downward bias in the near term. Key support lies at 24,500, while resistance is near 25,000. A breakout above this zone could shift sentiment once again towards the upside,” he said.
