Asia’ s Mixed Outlook as Fed Decision Approaches
Global markets showed mixed reactions on October 29, 2025, with Asian indices mostly rallying in anticipation of a possible U. S. Federal Reserve rate cut signal, while Indian stocks remained cautious. Japan’ s Nikkei 225 jumped over 2%, Taiwan’ s Weighted Index rose 1. 29%, and South Korea’ s KOSPI increased 1. 35%, all driven by expectations of dovish Fed hints later this year. Singapore’ s Straits Times Index fell slightly, reflecting uneven market enthusiasm. In India, the Nifty 50 opened at 25, 25,982 with a modest 0. 18% gain, and the BSE Sensex edged up 0. 03% to 84, 84,654, impacted by high valuations and subdued corporate earnings.
Indian Markets Stay Resilient Despite Earnings and Valuation Challenges
Market analyst Ajay Bagga highlighted India’ s strong performance in October, with the Nifty rising over 5% since June 2024, supported by liquidity, monetary backing, and AI- driven gains. However, he warned of medium- term risks from “pricing perfection.” Derivatives expert Dhupesh Dhameja from SAMCO Securities observed the Nifty’ s resilience within a narrow range, maintaining higher highs and lows, which could lead to an upward breakout if Fed comments remain supportive. Earnings reports from major companies like Larsen & Toubro, Coal India, Hindustan Petroleum, LIC Housing Finance, and Bharat Heavy Electricals are expected to be mixed, amid global inflation pressures and domestic demand fluctuations.
Fed’ s Decision to Influence Global Flows and India’ s 2026 Outlook
The Fed’ s policy announcement is crucial, as easing U. S. inflation sparks debate over rate cuts. Dovish signals could benefit emerging markets like India by lowering borrowing costs, while sustained high rates might strengthen the dollar and reduce liquidity. U. S. indices hit record highs last week driven by strong earnings and easing U. S.- China tensions, pressuring Asian markets to keep pace. Europe’ s moderating inflation and ECB hints at possible easing around mid- 2026 signal a global shift toward normalization. For India, strong consumption, services, and foreign inflows position it for outperformance into 2026, according to Bagga, depending on better earnings and stable liquidity. The Fed’ s subtle signals will determine whether current optimism turns into sustained global growth.
