The Indian equity markets experienced a significant rebound on Wednesday, bolstered by positive global cues and growing expectations of a US Federal Reserve rate cut. By mid-morning, the benchmark Sensex had climbed by 292.16 points, or 0.35%, settling at 84,920.32. Meanwhile, the broader Nifty index surged to 26,039.00, reflecting an increase of 102.80 points or 0.4%. Notable gainers in the Nifty pack included Adani Enterprises, Adani Ports, NTPC, and JSW Steel, with some stocks witnessing gains of up to 4%.

Several key factors contributed to this market uptrend. Firstly, optimism surrounding a potential India-US trade deal was sparked by comments from US President Donald Trump, who expressed "great respect" for Prime Minister Narendra Modi and hinted at the possibility of finalizing a trade agreement soon. Furthermore, market participants are keenly awaiting the Federal Reserve’s policy decision, with the CME’s FedWatch Tool indicating a nearly 100% probability of a 25 basis point rate cut. Analysts believe that such a move could enhance the attractiveness of emerging markets like India, potentially leading to increased foreign investments.

Additionally, strong foreign institutional investor (FII) activity played a crucial role in lifting market sentiment. On Tuesday, FIIs purchased shares worth Rs 10,339.80 crore, marking the highest single-day inflow since June 26, 2025. This surge in buying came after a minor selling session the day before, demonstrating renewed confidence in the markets. Global conditions also favored this uplift, as major Asian indices like Japan’s Nikkei 225 and Korea’s Kospi traded positively, further supported by a decline in crude oil prices, with Brent crude down 0.08% at USD 64.35 per barrel. This situation is favorable for India, a major oil importer, as it alleviates inflationary pressures.