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Key indices end higher on U.S. Fed rate cut hopes
Sep-12-2025

Indian equity benchmarks extended their winning streak and ended nearly half a percent higher on Friday in line with a global market rally amid rising hopes that the US Federal Reserve will cut interest rates next week. Optimism over a successful conclusion of India-US trade talks has also fuelled a rally in markets. 

Some of the important factors in trade: 

FIEO seeks immediate intervention of RBI amid multiple challenges faced by export sector: The FIEO has sought immediate intervention of the Reserve Bank of India (RBI), citing multiple challenges faced by the export sector, including rising tariffs, input cost inflation, demand volatility, and stressed that banks must act not just as financial enablers but as long-term partners in export sustainability.

Residential real estate sector likely to remain in stabilising phase in FY26: Rating agency ICRA has said that the residential real estate sector is likely to remain in a stabilising phase in FY2026. A material rise in the average selling prices (ASP) of residential units by more than 10% annually from FY2023 to FY2025 continues to pose a drag on affordability of buyers.   

Govt launches Rs 100-crore scheme for startups: New & Renewable Energy Minister Pralhad Joshi has launched a Rs 100-crore scheme for startups to support innovations in green hydrogen production. The scheme will provide up to Rs 5 crore per project for pilot projects in innovative hydrogen production, storage, transport and utilisation technologies. 

Rupee recovers against US Dollar: Indian rupee recovered from all-time lows and settled for the day higher against the US dollar, on weakness in the US dollar index and positive domestic markets.

Global front: European markets were trading mostly in red with U.K. stocks bucking the weak trend as the pound faced pressure on weak GDP data. Asian markets settled mostly higher as rising jobless claims coupled with in-line U.S. consumer price inflation data spurred expectations for more Federal Reserve rate cuts. 

Finally, the BSE Sensex rose 355.97 points or 0.44% to 81,904.70 and the CNX Nifty was up by 108.50 points or 0.43% to 25,114.00.     

The BSE Sensex touched high and low of 81,992.85 and 81,641.38 respectively. There were 18 stocks advancing against 12 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 0.09%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.76%, Industrials up by 1.28%, Telecom up by 0.88%, Metal up by 0.80% and PSU up by 0.67%, while FMCG down by 0.70%, Consumer Durables down by 0.17%, Consumer Discretionary down by 0.05% and Oil & Gas down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Bharat Electronics up by 3.67%, Bajaj Finance up by 3.41%, Bajaj Finserv up by 2.38%, Axis Bank up by 1.64% and Maruti Suzuki up by 1.51%. On the flip side, Eternal down by 2.01%, Hindustan Unilever down by 1.43%, Trent down by 0.79%, Titan Company down by 0.61% and Bharti Airtel down by 0.51% were the top losers.

Meanwhile, the coal ministry has said that the GST reforms will bring down the overall tax on coal and reduce the cost of power generation. Earlier, coal attracted 5% GST along with a compensation cess of Rs 400 per tonne. Recently, the GST Council recommended the removal of the GST Compensation cess and an increase in the GST rate on coal from 5% to 18%. Further, the new reforms bring down the overall tax on coal grades G6 to G17, which is in the range of Rs 13.40 per tonne to Rs 329.61 per tonne. This will lead to an average reduction of Rs 260 per tonne for the power sector, further reducing the cost of generation by 17 to 18 paise/kWh.

Moreover, the reforms will help in the rationalisation of tax burden on coal vis-a-vis its pricing. Earlier, a flat rate of Rs 400 per tonne was imposed as GST compensation cess without considering coal quality. This disproportionately affected low-quality and low-priced coal. With the cess removed, tax incidence across all categories of coal has now been rationalised to a uniform rate of 39.81%. Besides, the reform will help in promoting self-reliance by import substitution since the landing cost of high gross calorific value imported coal was lower compared to domestic low-grade coal, earlier, placing the domestic coal at a disadvantage. The coal ministry added that the removal of cess will level the playing field, strengthen India's self-reliance and curb unnecessary imports.

The GST reforms also remove the inverted duty anomaly by raising the GST rate to 18%. Earlier, coal attracted 5% GST but the input services used by coal companies used to attract higher GST rates, normally at 18%. This meant that a huge amount of unutilised tax credit was standing in the books of these coal companies as output GST liability was lower. Since, the outward GST liability of coal companies was lower as compared to GST paid on input services, this amount was continuously increasing and with no refund of this amount, this implied blockage of funds of coal companies. Now this unutilised amount can be used for some years to pay off the GST tax liability, leading to release of blocked liquidity. This will also help in staving off the loss of coal companies due to the accumulation of such unutilised GST credit.

The CNX Nifty touched high and low of 25,139.45 and 25,038.05 respectively. There were 30 stocks advancing against 20 stocks declining on the index.  

The top gainers on Nifty were Bharat Electronics up by 3.71%, Bajaj Finance up by 3.34%, Bajaj Finserv up by 2.23%, Hindalco up by 2.05% and Eicher Motors up by 1.73%. On the flip side, Eternal down by 1.90%, Hindustan Unilever down by 1.53%, Indusind Bank down by 1.02%, Bajaj Auto down by 0.97% and Trent down by 0.81% were the top losers.

European markets were trading mostly in red; France’s CAC fell 36.82 points or 0.47% to 7,786.70 and Germany’s DAX lost 64.75 points or 0.27% to 23,638.90, while UK’s FTSE 100 increased 29.87 points or 0.32% to 9,327.45. 

Asian markets settled mostly higher on Friday tracking Wall Street’s gains overnight as a relatively tame CPI reading coupled with more signs of jobs cooling spurred expectations for more Federal Reserve rate cuts. Moreover, falling bond yields, easing tariff concerns and extravagant expectations for AI-related earnings growth also supported market sentiments. Japan's Nikkei share average hit a record high with chip-related shares contributing to the rise, after US Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato reaffirmed in a joint statement that neither country would target currency levels in their policies. Seoul shares soared to a new record high for the third consecutive day followed by a rally of semiconductor shares. However, Chinese shares slipped after a recent string of gains. China's commerce ministry warned of countermeasures after Mexico proposed a 50% import tax on Chinese and Asian cars to protect local jobs.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,870.60

-4.71

-0.12

Hang Seng

26,388.16

301.84

1.16

Jakarta Composite

7,854.06

106.15

1.37

KLSE Composite

1,600.13

17.28

1.09

Nikkei 225

44,768.12

395.62

0.89

Straits Times

4,344.24

-11.58

-0.27

KOSPI Composite

3,395.54

51.34

1.54

Taiwan Weighted

25,474.64

258.93

1.03
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