Indian equities extended their positive momentum on Friday, with both benchmark indices opening firmly in the green as investors reacted to a clearer shift in global risk appetite. The US Federal Reserve’s rate cut earlier in the week provided the initial thrust, signalling a policy environment that could remain supportive of capital flows into emerging markets. Domestic sentiment received an additional lift from signs of diplomatic stability, after Prime Minister Narendra Modi and US President Donald Trump held what was described as a “warm and engaging” conversation.

Global markets have been on edge for months as investors assessed the likelihood of a prolonged tightening cycle in the US. The Fed’s rate cut - the latest indication that policymakers are prepared to ease financial conditions- has reset expectations around global liquidity. For India, lower US rates typically reinforce foreign investor participation, especially when domestic fundamentals appear relatively resilient.

Simultaneously, India–US relations have remained a key watchpoint for global investors, particularly as both countries navigate trade negotiations and strategic alignments. Trade frictions had weighed on sentiment earlier, with concerns that prolonged disagreements could spill over into investment and supply chain decisions.

By mid-morning, the Sensex had risen 371 points to 85,189.28, up 0.44 percent. The Nifty traded at 26,017.15, gaining 118.60 points or 0.46 percent. The advance was broad-based, reflecting renewed buying across sectors rather than a narrow rebound in select heavyweights. The India VIX slipped 2.5 percent to 10.14, reinforcing the sense of near-term calm.

The easing in volatility is notable. A lower VIX suggests traders are pricing in fewer abrupt swings, allowing for more predictable positioning after weeks of uncertainty driven by global macro shifts.

Adding to the day’s tone was commentary from Anand James, Chief Market Strategist at Geojit Investments. He highlighted that while the previous session’s rally from the 25,690 zone aligned with market expectations, the hesitation near 25,900 indicates that the recent upswing may not yet be a fully established trend. He pointed to 26,190 as the level to watch for further conviction. Conversely, failure to clear 25,977 - or a drop below 25,854 - could undermine upside momentum.

Investor behaviour on days following major global policy moves often reveals how durable the new trend may be. The early green tick across Indian equities suggests that traders view the Fed’s cut not merely as a short-term stimulus but as a signal that monetary conditions may remain friendlier through the coming quarter.

The Modi–Trump call added another layer of confidence. While it did not indicate an imminent policy breakthrough, the reaffirmation of cooperative intent eases geopolitical overhangs. Markets typically respond well to reduced diplomatic strain, particularly when trade negotiations have direct implications for sectors such as IT services, pharmaceuticals and manufacturing.

Cooling volatility also matters for institutional positioning. A VIX near 10 indicates a shift back toward measured trading activity, increasing the likelihood of systematic fund flows re-entering the market.

The Fed’s communication implied that its latest cut was aimed at sustaining economic momentum amid mixed global signals. For India, the interpretation is straightforward: accommodative US policy keeps relative yield dynamics favourable for emerging-market assets and reduces pressure on domestic monetary authorities.

On the diplomatic front, Modi’s description of the call as “warm and engaging” sends a message that communication channels between New Delhi and Washington remain functional and constructive. This helps anchor expectations that bilateral frictions will be managed through dialogue rather than escalation.

From a near-term standpoint, globally aligned sectors -IT services, export manufacturers and offshore-dependent industries -could see incremental sentiment improvement as geopolitical anxieties ease. Rate-sensitive pockets such as financials and real estate may also benefit from the perception that global liquidity conditions are turning more supportive.

However, the market is not yet in a runaway rally zone. Technical caution highlighted by analysts suggests the indices still need decisive confirmation above key resistance levels. Institutional flows will likely depend on whether this stability sustains through the week and whether geopolitical signals remain constructive.