Fed cut bets lift markets, Sensex, Nifty close in green as financials, metal and defence lead rally

Indian equity benchmarks ended higher on Friday, with both the Sensex and Nifty extending their gains for the second consecutive session. The BSE Sensex closed at 81,904, up 355 points (0.44%), while the NSE Nifty 50 settled at 25,114, gaining 108 points (0.43%) from the previous close of 25006 points.

Markets opened firm and built on early momentum, with buying seen across sectors. The Sensex touched an intraday high of 81,992 and a low of 81,641, while the Nifty traded between 25,139 and 25,038 before closing near the day’s highs.

Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth tech firm, said, "The NIFTY 50 wrapped up the week on a strong note, rallying from an opening low of 24,751 to close at 25,107—just shy of the crucial 25,150 resistance zone."

Ponmudi R stated that the options data reflects this bullish sentiment, with cumulative open interest (OI) at 21.33 Cr for calls and 16.07 Cr for puts, alongside a positive OI change of +3.43 Cr, which reinforces the upward bias. Strike-wise positioning indicates heavy call activity clustered between 25,000 and 25,500, while firm put support is emerging in the 24,200–24,500 range. "With volumes building steadily, investors are optimistic that long positions could drive the index higher toward 25,200–25,400 in the near term, with 25,000 now seen as a critical support and 24,900 as the next safety net if tested," he said.

The Bank NIFTY, meanwhile, closed the week near the descending broadening wedge line at 54,800—a technical inflection point. "A clean breakout above 55,000 could trigger a sharp rally, opening the path to 55,500–56,000, while failure to cross may invite a pullback toward 54,500–54,200. With the index hovering at this make-or-break level, investors are watchful and sentiment remains finely balanced, awaiting decisive cues in the week ahead," said Ponmudi R.

Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, "Sectorally, financial services and metals advanced 1% each, while the IT index posted modest gains led by Infosys, which rose after approving its largest-ever buyback worth ₹18,000 crore."

Khemka said that defence stocks surged, lifting the Nifty India Defence index over 4% on fresh order wins that spurred strong buying interest. Globally, a 25bps Fed rate cut is widely expected following weak US jobs data.

"Further, interest rate decisions from the Bank of England and Bank of Japan will also be closely tracked for their implications on global liquidity and risk sentiment. Overall, the near-term market outlook remains constructive, albeit with potential volatility around central bank events, while progress in India–US trade negotiations could provide an additional boost to investor confidence," added Khemka.

Besides, on global cues, Shrikant Chouhan, Head Equity Research, Kotak Securities, said, "Global equity markets were strong in the past week, while the Indian equity markets (+1.5%) underperformed most markets. Globally, a weaker-than-expected US jobs report and positive AI-related news-flow supported US tech, political change drove a rally in Japan, and investors remained bullish on Chinese AI plays. Nifty Midcap and Small Cap underperformed by increasing 0.2% each. Autos (+2.7%), IT (+2.6%), and PSU (+2.3%) were the major gainers, while FMCG (-0.3%) was the major sector that was down on a week-on-week basis. Domestic equity markets continue to be driven by expectations of improving consumption in the coming months. Both FIIs and DIIs were net buyers during the quarter.

In Global, in US, the U.S. consumer price index rose to 2.9% on an annual basis in August with yields edging higher. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended September 6 versus forecast of 235,000 claims.

Mexico plans to raise tariffs on vehicles coming from Asia, particularly China, to 50%.

In Europe, the U.K. economy stagnated in July, in line with expectations marking a slowdown in growth compared to the 0.4% expansion recorded in June. In Asia, in August 2025, the monthly inflation rate in China ranged at -0.4% compared to the same month in the previous year.