Stocks, bonds may rally on Powell's rate cut cue

The equity market and government bonds are expected to open on a positive note on Monday, following a decline in US Treasury yields after Federal Reserve (Fed) Chair Jerome Powell signalled that it's time to cut interest rates.

- ANJALI KUMARI & SUNDAR SETHURAMAN

Dealers also expect that the rupee will strengthen against the dollar on Monday.

The yield on the benchmark 10-year US Treasury bond fell by 7 basis points (bps) to 3.79 per cent after Powell's comments. It was trading at 3.86 per cent on Friday when the Indian money markets closed. Powell did not specify how much the US Federal Reserve might cut its key rate, but most analysts predict a 25-bp reduction in September.