India’s industrial output for December soared to 7.8%, beating the forecast of 5.5%. This indicates strong growth in the industrial sector at the end of last year. In other news, the Australian dollar stayed near 0.7000 as investors awaited decisions from the Federal Reserve. Oil prices faced potential changes due to geopolitical risks, while the demand for silver increased as a safe haven.

Federal Reserve Decisions

The Federal Reserve was expected to keep interest rates steady. Meanwhile, talks about Bitcoin Cash suggested a possible rise in retail interest due to changing market trends. In currency news, the Euro dropped below 1.2000, and the British pound fell under 1.3800 against the dollar. Gold continued its upward trend, staying below $5,300 as the Federal Reserve’s announcements approached. Looking ahead, earnings reports from major tech companies like Tesla and Microsoft are likely to shape the market. There’s an interest in how these factors will interact with inflation and central bank policies moving forward. India’s industrial output for December 2025 exceeded expectations at 7.8%, compared to the predicted 5.5%. This indicates a much stronger economy as we wrapped up last year, signaling positive economic momentum for the first quarter of 2026.

Economic Signals and Strategies

This strong data, particularly from the manufacturing sector, may lead to surprising corporate earnings. Therefore, investors might consider increasing positions in Indian equities, particularly through Nifty 50 futures for February. The HSBC Flash India Manufacturing PMI recently posted a strong reading of 58.5 for January 2026, indicating continued growth. A growing economy gives the Reserve Bank of India (RBI) solid reasons to keep interest rates stable to control inflation. The RBI has held its main repo rate at 6.5% since early 2024, and this new growth data makes it less likely that rates will be cut soon. As a result, we might see the Indian Rupee strengthen; selling USD/INR futures or buying put options on this pair could be a good strategy. The industrial data showed particular strength in capital and infrastructure goods, which fits with long-term trends. The government’s significant capital expenditure in the 2025 budget continues to support this sector. Traders should consider buying call options on industrial and banking stocks that benefit directly from this sustained growth. Create your live VT Markets account and start trading now.

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