These five stocks stand to benefit from the Fed rate cut

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Subscribe to enjoy similar stories. The US Federal Reserve’s recent 0.5% rate cut marks the start of what could be a prolonged easing cycle, with projections pointing to another 0.5% cut in 2024 and an additional 1% in 2025. The Fed’s aim is to get ahead of potential labour market challenges and stabilise the US economy amid looming uncertainties.

While the cuts are focused on the US, their impact is already resonating across global markets and India is well-positioned to capitalise on them. The Fed’s decision could unlock new opportunities for Indian investors. Companies stand to benefit from lower US rates, too, by leveraging cross-currency swaps to reduce borrowing costs, enhancing profitability and providing more room for growth.

The Fed's move will also pave the way for the RBI to cut interest rates. There is speculation that India’s central bank could cut rates as early as Q4FY25, and that there could be two cuts by March 2025. If the RBI does cut rates, it would create an even more favourable environment for Indian businesses.

Lower domestic borrowing costs would provide corporations with additional liquidity and cheaper access to credit, fuelling their expansion and boosting profitability across key sectors. Companies that would benefit from a weaker dollar, lower borrowing costs and a stronger rupee could see enhanced earnings potential in the coming months. As monetary conditions evolve, the focus will shift to sectors and businesses that can leverage these changes most effectively.

Here are some stocks that could benefit. A global software and tech innovation firm, Persistent Systems continues to make strides in digital engineering and enterprise modernisation. The company has built a solid reputation for its