Stock Market Outlook: Sensex and Nifty Set to Extend Rally Amid Optimism on U.S.-India Trade Talks & Fed Rates

With global uncertainties persisting alongside growing optimism surrounding U.S.-India trade talks and anticipated Federal Reserve rate cuts, Indian markets appear set to maintain their gradual upward momentum. The Nifty's ability to sustain levels above the crucial 25,000 mark and the Bank Nifty's potential breakout from consolidation will be key factors to watch on Friday.

Stock Market Outlook Today for September 12, 2025

The Indian equity markets extended their winning streak for the seventh consecutive day on September 11, fueled by hopes of easing trade tensions between India and the U.S. and growing expectations of an upcoming U.S. Federal Reserve rate cut. The benchmark indices Sensex and Nifty50 both demonstrated resilience, with the Nifty crossing the psychological 25,000 mark-a key milestone signaling positive investor sentiment.

The BSE Sensex closed at 81,548.73, rising by 123.58 points (0.15%), while the NSE Nifty50 ended at 25,005.50, gaining 32.40 points (0.13%). This marks a continuation of the positive momentum seen over the past week, with Nifty rallying more than 290 points (1.3%) over six sessions. The rally was primarily driven by gains in PSU banks, Oil & Gas sectors, and renewed optimism over India-U.S. trade talks, offsetting weakness in IT and Auto sectors.

Among sectors, the Nifty Oil & Gas index surged 1.1%, and PSU banks gained 0.74%, buoyed by reports that the government may revisit merger plans aimed at creating globally competitive public sector lenders. The media and energy sectors also performed well, with the Nifty Media index rallying over 1%. Conversely, Nifty Auto and IT indices faced some profit-booking pressure, closing with losses of 0.33% and 0.5% respectively.

Foreign institutional investors (FIIs) were net sellers to the tune of approximately Rs 115 crore on Wednesday, although domestic institutional investors (DIIs) remained active buyers, pumping in around Rs 5,000 crore.

Sensex, Nifty Prediction Today: What Traders Can Expect?

As per Bajaj Broking report, the Nifty 50 has formed a small bullish candle pattern with higher highs and higher lows, indicating consolidation with a positive bias. The index is currently testing the upper band of its recent consolidation range between 24,400 and 25,000.

A decisive close above the 25,000 level is crucial for the Nifty to extend its recovery towards the short-term resistance zone of 25,200 to 25,250. This breakout could trigger further buying momentum in the coming sessions.

On the downside, immediate support is seen near 24,800, and holding above this level will maintain the positive outlook. The broader support lies at the 24,400-24,300 range, which coincides with the 200-day Exponential Moving Average (EMA) and recent swing lows. Breaching this support could weaken the near-term bullish sentiment.

"Over the past six sessions, Nifty has rallied more than 290 points, or 1.3%. We expect this gradual uptick in market to continue supported by the government's GST reforms, expectations of a US Fed rate cut, and improving sentiment around US-India trade talks," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Bank Nifty Outlook for September 12, 2025

The Bank Nifty index has shown strong recovery signs after consolidating near its 200-day EMA, which has acted as a reliable support level. The index has broken its recent corrective phase, forming a higher high and higher low pattern on the daily chart-indicative of renewed bullish momentum.

The consolidation range between 53,779 and 54,670 has been absorbed, and a breakout above this zone suggests the Bank Nifty could advance towards 55,350 in the near term. Immediate support is placed at Monday's low of 54,300.

Momentum indicators, including the daily stochastic, are trending upward, reinforcing the likelihood of a pullback rally continuing in the banking index.

Stocks in Focus Today: Sector-wise Stocks Performance Updates

Sector-wise, Oil & Gas, Telecom, and Metals stocks showed strength on September 11, supported by positive global cues. In contrast, Technology, Financials, and Cement sectors faced some selling pressure as investors booked profits amid cautious global sentiment ahead of critical U.S. economic data and trade negotiations.

The broader markets, represented by Nifty Midcap 100 and Smallcap 100 indices, remained largely flat, signaling a cautious stance among mid and small-cap investors.

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