New Delhi, Dec. 11 -- After the Reserve Bank of India (RBI), the US Federal Reserve, too, has cut benchmark interest rates, creating a macro-favourable environment for equities. On December 5, the RBI cut the repo rate by 25 basis points to bring it to 5.25%, and also revised GDP growth estimates upwards and inflation forecast downwards. On December 10, the US Federal Open Market Committee (FOMC) cut the federal funds rate for the third consecutive time on December 10, bringing it to 3.50%-3.75%, its lowest level since 2022.

Rate cuts are positive triggers for the market, as they make borrowings cheaper and liquidity easier, improving the profitability of companies. However, the markets have given a measured response to the recent rate c...