Indian stock indices closed higher on Wednesday, buoyed by expectations of a US Federal Reserve rate cut. Investors anticipate a 25-basis point reduction and are keenly awaiting commentary on future monetary policy. Easing foreign fund outflows and positive Fed signals could propel the Nifty towards new highs, with mid and small-cap indices also showing gains.

Nuvama Alternative & Quantitative Research anticipates significant shifts in AMFI s upcoming stock reclassification in January 2026. Several companies, including HDFC AMC and Bosch, are expected to ascend to large-cap status, while others like Info Edge and Lupin may transition to mid-cap. These reclassifications prompt fund managers to realign their portfolios, reflecting the dynamic nature of market capitalization.

The Federal Reserve has initiated its first interest rate cut since December, reducing it by a quarter-point to 4.1% due to growing concerns about the labor market s health. Projections indicate two more cuts this year and one in 2026, despite investor expectations for more.

The Indian rupee strengthened, surpassing the 88-mark against the dollar due to a weakening US dollar ahead of a Federal Reserve rate cut and optimism surrounding India-US trade negotiations. The rupee gained 24 paise, marking its largest intraday increase in nearly a month.

Urban Company s stock market debut was a resounding success, listing at ₹162.3, a 58% premium over its IPO price of ₹103. The stock closed at ₹169, reaching ₹179 intraday, valuing the company at ₹24,266.7 crore. Analysts attribute the high demand to the company s unique position as the only listed online home services provider and the small IPO size.

Ajay Bhatia, ex-CEO of QuantLase Lab LLC, settled an insider trading case with Sebi by paying ₹1 crore. The settlement includes a six-month market debarment and returning ₹55.3 lakhs with interest. The case involved Adani Green Energy s share issuance to IHC, where Bhatia allegedly received unpublished price-sensitive information.

Markets saw a slight increase amid optimism about policy changes and strong domestic investment, though FII selling and anticipation of the US Fed s policy decision tempered gains. Nifty is approaching 25,500, supported by banking strength and sector rotation. Several companies like ZEE, Apollo Tyres, and Hyundai India are in focus due to recent developments.

NaBFID is prioritizing bank loans over bond markets this year due to lower interest rates and significant borrower prepayments exceeding ₹10,000 crore. Banks are offering rates below 7%, making them more attractive than bond issuances. This shift in strategy follows repo rate cuts, enabling banks to provide cheaper financing.

iValue Infosolutions, an enterprise technology services provider, is set to raise up to ₹560 crore through an offer for sale, reducing the promoter group s stake to 32.7%. The company s revenue dipped in FY24 but recovered in FY25, with net profit increasing. Investors may consider waiting for a stable financial pattern post-listing, given the fluctuating cash flow and lower Ebitda margin.

India s IPO market is poised for substantial growth, potentially adding $1.3-1.5 trillion in market capitalization over the next 7-10 years, driven by strong domestic investor participation. Jefferies India highlights the increasing role of domestic institutions in IPO anchor books and Sebi s supportive regulatory measures. While FIIs express concerns about valuation mismatches, AI is expected to enhance efficiency in documentation processes.