Stock Market Outlook: Sensex, Nifty May Rally Further as Support Holds; Fed Rate Cut Decision to Decide Next

September 17 is set to be an important trading day for Indian markets as investors await the U.S. Federal Reserve's monetary policy decision, which could influence global risk appetite and market direction. Domestic indices like the Sensex and Nifty are expected to trade with cautious optimism, factoring in recent positive momentum from trade talks and steady corporate earnings.

Stock Market Outlook For September 17, 2025

Indian stock markets closed strongly on Tuesday, September 16, 2025, as the benchmark indices Sensex and Nifty50 gained momentum ahead of the highly anticipated U.S. Federal Reserve policy decision scheduled for Wednesday.

The Sensex climbed 594.95 points, or 0.73%, to finish at 82,380.69, while the Nifty50 advanced 169.90 points, or 0.68%, to close at 25,239.10. This upward movement was largely fueled by optimism over progress in U.S.-India trade talks, which eased investor concerns and encouraged broad-based buying across sectors.

Stocks in Focus: Sector-wise Stocks Performance Trend

On the sectoral front, the market witnessed strong participation from high-beta sectors such as automobiles, realty, IT, and media, all of which outperformed during the session. Meanwhile, defensive sectors like FMCG and healthcare saw some profit booking, indicating investors' preference for riskier assets in the current environment.

The broader market also showed resilience with the Nifty Midcap 100 and Smallcap 100 indices gaining 0.54% and 0.95%, respectively, signaling sustained strength in mid and small-cap stocks.

"Sector-wise, Automobile, Construction, Consumer Durables, Media, and Metals led the charge with stellar gains, while Consumer Goods showed mild weakness. On the derivatives front, the tone remained strongly bullish, with the advance-decline ratio firmly in favor of the bulls as 141 stocks advanced against 71 declines. The market's spirited move reflects strong investor confidence, setting the stage for potential follow-through in the coming sessions," Ashika Institutional Equities noted.

Sensex, Nifty Prediction Today: US Fed Rate Cut in Focus Today; What Traders Are Expecting?

Looking ahead to September 17, technical indicators suggest a positive outlook for the Nifty50 index. The index formed a sizable bullish candle on Tuesday, creating a higher high and higher low, which indicates the continuation of the upward trend. The Nifty has recently experienced a bullish crossover of the 20-day and 50-day exponential moving averages (EMA), adding to the positive momentum.

Bajaj Broking stated, "Index witnessed a follow through strength post a bullish crossover of the 20- & 50-days EMA in the daily chart as highlighted in last edition. Nifty in yesterday session closed at the resistance area of 25,200-25,250 levels. A decisive close above 25,250 would signal a reversal of the ongoing corrective phase and could potentially unlock further upside towards the 25,500 levels in the coming weeks."

"Failure to sustain above 25,250 will lead to some consolidation in the range of 25,250-24,850. On the downside, immediate support is seen near the 24,850 levels being the confluence of the 20- & 50-days EMA and the recent trendline breakout area, holding above the same will keep the bias positive," the report added.

The Bank Nifty also displayed bullish signs, forming a strong bull candle and closing above the 50-day EMA as well as the recent breakdown zone between 54,800 and 55,000. This suggests a continuation of its recovery for the tenth consecutive session.

As per Bajaj Broking, if the Bank Nifty surpasses Tuesday's high, it could target 55,500 initially, with potential further upside to the 56,000-56,150 range, which corresponds to the 61.8% Fibonacci retracement of its prior decline. On the downside, support levels to watch are 54,700, marked by the 20-day and 100-day EMAs, and a stronger support at 54,000, near last week's lows and a key retracement area.

Market analysts from Ashika Institutional Equities highlighted the bullish market sentiment, noting that the Nifty surged from an opening level of 25,073 to an intraday high of 25,229.75, driven by optimism regarding ongoing U.S.-India trade negotiations.

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, emphasised that the market's positive momentum is likely to continue as investors remain focused on the U.S. Federal Reserve's upcoming policy decision and ongoing trade talks.

Attention Remains on US-India Trade Talks

Mr Khemka noted, "On the trade deal front, attention remains on the scheduled meeting between chief negotiators from India and the U.S. for stock-taking discussions on the proposed bilateral trade agreement (BTA). This is the first in-person discussion since the 50% tariffs on Indian goods kicked in from August 27."

Globally, focus is on key U.S. macro data, with retail sales due later today, followed by the Fed's policy decision tomorrow - where markets are betting on the first rate cut since 2024. Investors will also track EU and UK CPI numbers due tomorrow, which may further guide sentiment. "Going forward, we expect the market to continue its gradual upmove, while tracking key trade-related developments and the U.S. Fed rate cut decision, which would play a pivotal role in shaping near-term sentiment," he said.

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