F&O Talk | Bank Nifty may eye 57,000 mark in medium term, overall market view bullish: Sudeep Shah of SBI Securities

PSU Banks, ending in the green.

Realty, metals, FMCG, private banks and financial services led gains. Analysts believe that strong FII inflows, healthy domestic macros, and easing concerns over the U.S. economy are expected to sustain the positive momentum.

Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities interacted with ET Markets regarding the outlook on Nifty and Bank Nifty post the Fed rate cut. Following are the edited excerpts from his chat:

How does a Fed rate cut of 50 bps typically affect equity markets? Does it affect in the long run or the impact is now done?

The Federal Reserve adopted an aggressive approach in its latest policy meeting, lowering interest rates by 0.5% to a range of 4.75-5%. This marks the first rate cut since March 2020. As a result, central banks globally are anticipated to follow suit. In the past 2 decades, the Fed had gone ahead with a 50-bps rate cut on 2 occasions in 2001 & 2007 when it was dealing with the economic crisis and the Nifty had thrived on both occasions. The equity markets have reacted positively, with major indices, including ours, reaching new all-time highs. Historically, rate-cut cycles are viewed as favourable for riskier assets, including emerging market equities, as they typically lead to increased foreign institutional investment (FII) inflows which also implies incremental momentum in large-caps over mid and smallcaps.

With the new all-time high in the Nifty on Friday, what are the next levels to