7 things that changed for the Indian stock market overnight – Gift Nifty to US Federal Reserve interest rate decision
India stock market: The Indian benchmark equity indices, Sensex and Nifty 50, are expected to open higher on Thursday following gains in global markets after the US Federal Reserve kept the key interest rates unchanged and foresees three rate cuts next year.
The Asian markets rallied while the US stocks jumped overnight on a dovish commentary by the US Fed Chair Jerome Powell.
The domestic equity markets on Wednesday ended with marginal gains with the benchmark Nifty 50 holding above 19,900 level.
The Sensex ended 33.57 points, or 0.05%, higher at 69,584.60, while the Nifty 50 closed at 20,926.35, up 19.95 points, or 0.1%.
“Market has been consolidating at higher levels for the past few sessions post the recent run-up. Overall, we expect the market momentum to continue on a higher side supported by lower than expected inflation data, 16-month high IIP data, fall in crude oil price to 7 month low and FIIs buying,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded higher on Thursday tracking overnight gains on Wall Street after the US Federal Reserve held interest rates steady for a third straight time and signaled rate cuts in 2014.
Japan’s Nikkei 225 gained 0.54%, while the Topix eased 0.14%. South Korea’s Kospi rallied 1.46% and Kosdaq jumped 1.69%. Hong Kong’s Hang Seng index futures hinted to lower open.
Australia’s S&P/ASX 200 surged 1.44%, hitting levels not seen since August 1.
Gift Nifty
Gift Nifty was trading around 21,240 level as compared to Nifty futures’ previous close of 21,035, indicating a positive start for the Indian stock market today.
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US stock market
The US stock market indices ended higher on Wednesday with the Dow Jones industrial average hitting its first record closing high since January 2022 after the Federal Reserve left interest rates steady and said it sees lower borrowing costs in 2024.
The Dow Jones Industrial Average jumped 512.3 points, or 1.4%, to 37,090.24, while the S&P 500 rallied 63.39 points, or 1.37%, to 4,707.09. The Nasdaq Composite ended 200.57 points, or 1.38%, higher at 14,733.96.
US Federal Reserve
The US Federal Reserve kept the benchmark lending rate unchanged in the range of 5.25% to 5.50% and signaled that the interest rate hike cycle is over.
The Fed Chair Jerome Powell-led Federal Open Market Committee (FOMC) also cut the median projection for interest rates at the end of 2024 to the midpoint between 4.50% and 4.75%, signaling they now expect 75 basis points (bps) of cuts from the current levels next year.
US producer prices
US producer prices were unchanged in November from a month earlier amid cheaper energy goods. Excluding food and energy, the core PPI was also flat.
As per the Bureau of Labor Statistics data, from a year ago, the overall measure was up 0.9%, while the core gauge was up 2%, the least since January 2021.
Dollar Dives, Treasury yields drop
The US dollar declined after the Federal Reserve signaled that the interest-rate hike cycle has come to an end while forecasting lower borrowing costs in 2024, Reuters reported. The US dollar index, which measures the greenback against a basket of currencies, was last 102.87 after dipping as low as 102.77 overnight.
The yield on 10-year US Treasuries fell below 4% for the first time since August as the Treasury market saw its biggest one-day rally on Wednesday. The rate on two-year notes extended declines after plunging as much as 31 basis points in the previous session, while the 10-year yield traded at 3.998%.
Japan core machinery orders
Japan’s core machinery orders rose 0.7% in October from the previous month, Reuters reported. On a year-on-year basis, core orders slipped 2.2%, versus a forecast for a 5.1% drop, the Cabinet Office data showed.
(With inputs from Reuters)
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