After three rough days, the Indian stock markets jolted back to life on Wednesday! The BSE Sensex soared by a massive 1,022 points to hit 85,609, just a few hundred points shy of its all-time high of 85,978 from September 27, 2024. The Nifty 50 also didn’t want to be left behind, jumping 320 points to 26,205 – nearly touching its fresh record high of 26,277. The banking index Nifty Bank reached a new high at 59,555. Markets are buzzing with excitement thanks to growing hopes that the US Federal Reserve might cut interest rates in December. Softer-than-expected US economic data convinced investors that a rate cut is on its way. According to CME Group’s FedWatch, a whopping 85% of people expect an interest rate cut from Fed Chair Jerome Powell soon. But it’s not just India; Asian markets also danced to the upbeat tune. Japan’s Nikkei rocketed up 1.8%, and MSCI’s Asia-Pacific index outside Japan jumped 1%. Meanwhile, US stocks extended their rally for the third day, led by weak retail sales and low consumer confidence data strengthening the case for the Fed’s easier money policy. Adding more spice to the rally, oil prices hovered just above $60, near a one-month low, easing worries for India’s import costs. JP Morgan even predicted Brent crude could dip into $30s by FY27 due to oversupply, which could be fantastic news for India’s oil-dependent economy. Foreign Institutional Investors (FIIs) are back in the buying mood. On November 25 alone, they purchased shares worth Rs 785 crore. Experts like V K Vijayakumar from Geojit Investments say, “Going forward, FII selling is likely to decline due to the fading of the AI trade and the improving prospects for Indian equities.” Good earnings and a positive outlook may help reverse the earlier FII outflows. Speaking of earnings, Q2 results show signs that the worst might be over. Downgrades have slowed, and analysts see a return to double-digit earnings growth from FY27. Ratings agency ICRA predicts India Inc revenues will grow 8-10% in Q3 FY2026, powered by steady rural demand and early hints of urban consumption revival. Lower input costs, especially for crude oil and coal, will help companies boost their profits. Wednesday’s market buzz was broad-based, with midcap and smallcap stocks racing ahead by over 1%, bouncing big after a choppy day on Tuesday. High-weight stocks like Reliance Industries, which is up 26% year-to-date, and HDFC Bank, up 13%, cranked up the rally. All eyes are now on the Reserve Bank of India’s final Monetary Policy Committee meeting from December 3-5. Everyone expects a 25 basis points repo rate cut because inflation has cooled down sharply. RBI is likely to take a cautious, watchful approach to see how its policy moves affect growth and prices before taking further action. This optimism helped rate-sensitive sectors like real estate, PSU banks, and autos rise about 1% each on Wednesday. So, with US Fed rate cut hopes, crude oil easing, robust earnings, and RBI’s expected rate cut, the Indian markets are charging ahead with fresh energy. Will the bulls keep their charge as we enter December? Stay tuned!