The U.S. Federal Reserve recently lowered interest rates by 25 basis points (to 4.00-4.25%), marking its first cut of 2025. While anticipated by markets, the move has prompted a range of reactions among Indian analysts about what this means for domestic equities.

What experts see as positives :

• Lower U.S. yields make Indian stocks more attractive, especially to foreign investors, by enhancing the appeal of emerging market returns.
• A softer U.S. dollar helps the rupee, easing import costs and helping curb inflation impulses.
• Possibility of more rate cuts ahead boosts risk appetite, especially for sectors like IT, banking, and financials.

Caveats and limits :

• Much of the rate-cut impact has already been priced into markets; short-term upside may be muted.
• Inflation, domestic policy risks, and global uncertainties (like trade issues) could dampen gains.
• Borrowing costs in India and the impact of U.S. policy do not always transmit immediately; RBI decisions, local credit off-take, and macro-fundamentals remain key.

Overall verdict: The Fed’s cut is seen mostly as a positive for Indian equities, especially in giving breathing space to markets. But significant gains will likely depend on further rate easing, stable corporate earnings, and favorable domestic economic policies.