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Below the Quote on Federal Reserve announcement lowered its benchmark interest rate by a half percentage point today by Dr. Ravi Singh, SVP- Retail Research, Religare Broking Ltd

The Federal Reserve's 50 basis points cut in interest rate is a positive factor for Indian equities as it increases global liquidity thus allowing more funds from abroad to flow into investor destinations like India. This increases confidence among investors and aids in the momentum of the stock market. Moreover, this also exerts pressure on the Reserve Bank of India (RBI) to think about a similar rate cut, especially while the domestic economy is still recovering. An interest rate decrease by RBI will indicate that it is committed towards promoting growth and relaxing monetary conditions. It is anticipated that RBI would respond by decreasing rates by 25 basis points which will further stimulate economic activities and uplift market emotions further. As such, our stance on infrastructure, manufacturing and Fast Moving Consumer Goods (FMCG) sectors remain positive in light of the improving economic conditions.

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