Fed Rate Cut Bets Are Fueling Global Rally — Here's What It Means for Indian Markets

Good news from Wall Street is rippling across Asia. Weak U.S. payroll data and softer retail sales sparked fresh expectations for a December Fed rate cut, sending American stocks up for a third straight day (Dow +1.4%, S&P 500 +0.9%). The dollar weakened and Treasury yields dropped below 4% — the lowest in nearly a month.

Asian markets are riding the wave. Gold ticked up as the dollar eased, while oil stayed flat after hitting a month-low on Ukraine peace deal chatter.

Back home, Indian shares are poised to open higher today. The rupee settled at 89.22 against the dollar (down 6 paise), while foreign investors scooped up Rs 785 crore worth of shares on Tuesday. Domestic institutions were even more bullish, net buying Rs 3,912 crore.

The catch? U.S.-India trade deal uncertainty could throw some curveballs and create volatility as the session unfolds. Meanwhile, European stocks closed firm (Stoxx 600 +0.9%, DAX +1%, CAC 40 and FTSE 100 each +0.8%) as Ukraine peace negotiations showed signs of progress.

Bottom line: Lower rates could be good for emerging markets like India, but keep an eye on those trade negotiations.