A study by Capitalmind Financial Services reveals that Indian markets have remained resilient over the past two decades despite fluctuations caused by US Federal Reserve rate changes. The report highlights how Indian equities have managed to weather the impacts of the Fed’s monetary easing and tightening cycles.
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- Fed recently cut rates by 50bps, first since March 2020.
- Further 25bps cuts expected in November and December 2024.
- Indian markets typically react negatively to Fed hikes but recover the next day.
- Over time, Nifty has outperformed or matched S&P 500 in local currency terms.
- Strong US consumer spending persists despite recession fears.
- Nifty gained 310% during Fed’s easing cycle (1990-1994).
- Tightening phases occasionally saw Nifty drops, e.g., 23% in 1994-1995.
- Nifty gained post-Fed announcements 50 out of 78 times since 1990.
- Median Nifty return was -0.2% following Fed announcements.
- Fed’s rate decisions are a key factor, but Indian markets show resilience.
