On September 18, Indian benchmark indices extended gains, with the Nifty comfortably holding above the 25,400 mark, aided by firm global cues. The Federal Reserve lowered interest rates by 0.25% on Wednesday for the first time in nine months and expects two more rate cuts this year as concerns about labor market softening, which threatens the economy, outweigh concerns about inflation remaining above the central bank's target.

At the close, the Sensex rose 320.25 points, or 0.39%, to 83,013.96, while the Nifty 50 rose 93.35 points, or +0.37%, to 25,423.60, reflecting continued buying interest in key heavyweights.

On a sectoral basis, Pharma led the charge with a strong 1.5% increase, followed by the IT index, which gained 0.8%, while Private Banks and Metals posted moderate gains of 0.4% and 0.3%, respectively. Conversely, pockets of profit-taking dragged the Energy, Media, and Capital Goods indices down by approximately 0.3% each. The Midcap index rose 0.38%, while the Smallcap index rose only 0.29%, indicating continued broad-market participation.

Also Read: Market Closing Commentary by Bajaj Broking and MOFSL: Sept 17th

Nifty Outlook

The index has formed a high wave candle with a long lower shadow, indicating buying demand at lower levels and highlighting the continuation of the upward trend. In the daily chart, the index maintains higher highs and higher lows.

As mentioned in an earlier edition, Nifty has recently generated a bullish crossover of the 20- and 50-day EMAs, indicating a positive short-term bias. In the coming sessions, the Nifty will maintain a positive bias and rise to levels between 25,500 and 25,550. On the downside, immediate support is seen near 24,900-25,100 levels, which are the confluence of the 20-day EMA and the 50% retracement of the current pullback (24404-25448).

Motilal Oswal Financial Services Limited

The Nifty gained 93 points (+0.4%) to close at 25,423 on Thursday, as benchmarks rose for the third straight session following the US Federal Reserve's 25 basis point rate cut to 4-4.25% and signal of two more reductions this year. The broader indices also closed higher, with the Nifty Midcap100 and Smallcap100 rising 0.4% and 0.3%, respectively. Most indices closed in the green.

Pharma was the biggest gainer (+1.5%), followed by IT (+0.8%), as stocks recovered following the Fed rate cut. In the auto industry, the GST rate cut has significantly reduced acquisition costs for PVs, SUVs, premium 2Ws, and tractors. Along with rural recovery aided by normal monsoons, higher kharif sowing, lower interest rates, and strong demand, the sector's outlook remains positive.

Financials are on the verge of a profit recovery, with banks expected to lead as margins stabilize and credit growth resumes. Reasonable valuations, reduced stress in retail loans, and structural drivers such as rising SIP flows and insurance penetration all support a positive growth outlook. Defence stocks remain a focus, aided by strong policy momentum and project transparency. The Defence Ministry's new 15-year roadmap (TPCR-2025), which includes 457 programs—nearly doubling the previous plan—has fueled optimism about the sector's long-term growth.

"We expect the gradual upward trend to continue, with tariff-related developments guiding near-term sentiment", stated MOFSL.