The move injected optimism into global markets, helping lift sentiment across sectors even as the Indian rupee weakened to a new low amid concerns over delayed progress on a trade deal with the United States.

The Nifty 50 closed 0.55% higher at 25,898.55, while the BSE Sensex gained 0.51% to end at 84,818.13, marking a strong reversal after days of downward pressure.

Both indices had shed nearly 1.6% each over the previous three sessions, making Thursday’s resurgence a notable shift in direction.

The rally was broad and resilient, with fifteen of the sixteen major sectors finishing in positive territory, highlighting widespread investor participation.

Small-cap and mid-cap indices also rose 0.8% and 1% respectively, reaffirming the depth of the recovery and the appetite for risk across market segments.

Financials and information technology stocks, which had fallen sharply earlier in the week, recovered steadily with gains of 0.6% and 0.8%.

Analysts attributed the bounce to improved global liquidity and expectations of supportive monetary conditions following the Fed’s policy shift.

Metal stocks also surged, rising 1.1% as global metal prices firmed due to a weakening U.S. dollar after the rate cut.

The positive global cues helped lift domestic sentiment, supporting commodity-linked sectors and boosting overall risk appetite.

Market strategists described the Fed’s decision as encouraging but measured, noting that projections for only one rate cut in 2026 underscored a cautious policy path ahead.

However, they agreed that the immediate boost to liquidity and market morale played a key role in Thursday’s rally.

Despite the upbeat market response, the Indian rupee slipped to a record low against the U.S. dollar, reflecting persistent concerns over higher tariffs and the lack of a trade agreement with Washington.

Dollar outflows also added pressure, signalling that currency stability may take longer to achieve even as equity markets strengthen.

Among prominent gainers, Tata Steel climbed 2.6% after acquiring a stake in Thriveni Pellets, a move expected to secure critical iron ore pellet supply and strengthen the company’s operational capability.

The development was viewed positively by investors, adding momentum to the metals sector’s already strong performance.

Hindustan Zinc and its parent company Vedanta also posted gains of 2% and 1% respectively, supported by silver prices touching record highs in international markets.

The surge in precious metals reinforced broader commodity-led enthusiasm and contributed to the overall market uplift.

Analysts say that while structural pressures remain—particularly around currency stability and external trade issues—the latest rally reflects the underlying strength of India’s equity markets.

They note that supportive global policies, stable domestic fundamentals and corporate growth prospects continue to anchor long-term investor confidence.

Thursday’s broad-based rebound not only broke the market’s losing streak but also reaffirmed India’s position as one of the most resilient equity markets globally.

With improving sentiment and optimism about future liquidity conditions, investors are watching closely for further momentum in the days ahead.

The rally was further amplified by an extraordinary surge in silver, which touched a fresh record high, marking one of the strongest sessions for metals this year.

Spot gold rose 1.2% to $4,280.08 per ounce, achieving its highest level since late October and extending a steady upward trend supported by softer U.S. monetary policy.

U.S. gold futures for February delivery also advanced by 2.1% to settle at $4,313 per ounce, signalling strong forward-looking sentiment among traders.

Silver delivered one of the standout performances of the day, jumping nearly 4% to $64.22 per ounce and hovering close to the record high of $64.31 reached earlier.

Its rapid surge added significant momentum across the metals market, lifting both platinum and palladium as investors poured into hard assets.

Analysts noted that silver’s powerful rally acted as a tailwind for the broader precious metals sector.

Market observers emphasised that the strong upward move reflected global interest in alternative stores of value at a time of shifting financial conditions.

The U.S. dollar weakened to an eight-week low after the Fed’s 25-basis-point rate cut, making dollar-priced metals more affordable for international buyers.

This decline helped fuel additional buying, with traders viewing the environment as favourable for non-yielding assets such as gold.

Experts pointed out that inflation remains above the central bank’s long-term target, creating conditions that traditionally support gold’s role as a safe-haven investment.

Lower interest rates in an inflationary environment tend to boost demand for precious metals, reinforcing the bullish outlook.

The rate cut marked the Fed’s third consecutive quarter-point reduction, with policymakers signaling a potential pause as they continue to monitor labour market indicators and inflation pressures.

Despite this cautious tone, the overall shift toward looser monetary conditions remains a key driver of strength in the metals market.

Political factors also added context, as U.S. President Donald Trump has consistently supported lower interest rates during his second term.

His expected nominee for the next Federal Reserve chair is anticipated to maintain a dovish stance, providing additional reassurance to markets.

Traders now await the upcoming U.S. non-farm payrolls report, scheduled for release on December 16, which is expected to offer new signals on employment trends and help shape expectations for future rate decisions.

The results of the report may further reinforce or moderate the current rally in precious metals.

In India, pension funds received approval to invest in gold and silver exchange-traded funds, expanding access to metals exposure for long-term savers.

The move is expected to strengthen domestic demand for precious metals and broaden market participation.

Meanwhile, platinum prices rose 2.5% to $1,697.61, supported by stronger industrial demand and spillover effects from the precious metals rally.

Palladium climbed 1.1% to $1,492.55, maintaining its steady advance in line with improved global investment sentiment.

The day’s strong performance underscored the resilient appeal of gold and silver in times of economic adjustment and currency volatility.

With supportive monetary conditions and rising global interest, precious metals continue to shine as reliable assets in a shifting financial landscape.