Mumbai: Buoyed by positive US economic data and other global cues, the Indian stock markets continued their recovery rally this week. With the US government now confirming a rate cut (most likely in September), domestic markets are anticipated to respond positively to the development on Monday.

With Federal Reserve Chair Jerome Powell saying that “the time has come” for a monetary policy adjustment, US markets rallied on Friday, with the S&P 500 index posting gains that took it closer to a fresh record high.

A rate cut of up to 25 bps in September will be taken positively by the market in the short-term, according to market watchers. Further trend will depend on the optimistic view of the central banks that the accommodative policy will be sustained, guiding further cuts in the coming policies.

Indian sectors that might benefit from a Fed rate cut are IT, BFSI, auto and realty. Overall, said experts, the rate cuts will be welcomed positively by the Indian markets as the RBI is following the US Federal Reserve’s lead when it comes to interest rates.

For Indian markets this week, positive global sentiment from ceasefire talks between Israel and Hamas, along with a decline in crude prices, contributed to the rally.

However, inflationary pressure in Japan and the appreciation of the Yen tempered the market’s gains at the end.