By Vivek Kumar M and Bharath Rajeswaran
(Reuters) -India’s equity benchmarks inched lower on Thursday after the Federal Reserve cut interest rates as expected but raised doubts over a further reduction in 2025, while investors awaited details from the trade talks between U.S. and China.
The Nifty 50 was down 0.45% at 25,935.9, while the BSE Sensex lost 0.44% to 84,626.81, as of 9:41 a.m. IST. The benchmarks gained about 0.5% on Wednesday, finishing less than 1% below their all-time highs hit in September 2024.
The Fed cut interest rates by 25 basis points but Chair Jerome Powell signalled that this could be the last cut this year due to the lack of official data during the ongoing federal government shutdown.
“Whilst the Fed is easing, it is doing so with caution, which could cause increased volatility in equities during the uncertainty and bond yields could push higher if the market reduces expectations of deeper cuts,” said Ross Maxwell, global strategy lead at VT Markets.
U.S. President Donald Trump held talks with China’s Xi Jinping at a South Korean air base on Thursday, with both leaders sounding optimistic about cooling trade tensions.
All the 16 major sectors fell in early trade, with pharmaceutical stocks losing the most with a 1.1% decline.
Drugmaker Dr Reddy’s Laboratories lost about 4.5%, and was the top loser on pharma and benchmark Nifty indexes, after it received a notice of non-compliance from Canada’s Pharmaceutical Drugs Directorate for the semaglutide injection.
“This is expected to delay its planned first-to-market launch in January, eroding its first mover advantage,” JP Morgan said in a note.
The broader small-caps and mid-caps were down 0.1% and 0.3%, respectively.
Among other stocks, infrastructure major Larsen & Toubro rose 2.2% to a record high, after reporting strong quarterly profit and forecasting an annual order outlook beat.
(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Sumana Nandy, Janane Venkatraman and Mrigank Dhaniwala)
