Debt markets market has turned sanguine about US Fed pausing or cutting rates sooner than earlier anticipated. The priority for the US Federal reserve may shift to financial stability and take precedence over elevated inflation.
The Indian markets resumed the corrective tone after a pause for a week and shed over a percent. Lingering fear of sharp rate hikes by the US Fed and fresh turmoil in the US banking space turned the tone completely.
A combined newsflow around three things dominated the headlines. First it was Adani group stocks, along with it came Q3 results. Last but not the least, what the US Fed will say and in the last 24 hours.
The yen was its strongest in six months amid speculation that the Bank of Japan might move away from its ultra-easy policy. The dollar index, which measures the greenback against six major currencies, has made a subdued start to 2023. The yen strengthened 0.65% to 129.88 per dollar, its strongest since June.
The BSE Sensex has lost nearly 4 percent, while NSE Nifty fell over 3 percent. The Nifty is now trading below the 20-day moving average level. More hawkish-than-expected tone of the US Fed, overvaluation of the Nifty compared to global peers, geopolitics, and profit-booking and so on.
Pankaj Murarka, CIO, Renaissance Investment Managers, says markets have priced in a lot of good news. India has been a standout market in that sense and a standout economy as well in terms of resilience despite growth headwinds. Global investors starting to reallocate capital to emerging markets next year once the US Fed goes on to a pause.
Hopes of fresh economic stimulus from China also lifted sentiment with Japan's Nikkei surging over 1% to 2-month highs. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%. US markets are closed for the Thanksgiving holiday today.
S&P BSE Sensex ended down 0.84% to 61,144.84 and NSE Nifty 50 index lost 0.81% to 18,159.95. The Nifty IT and Nifty Realty indexes were top drags, falling 1.55% and 1.27% respectively. ONGC fell over 4%, its steepest decline in four months.
Gold prices logged gains for the third week in a row at the domestic markets. But the yellow metal could not preserve strength after testing 3-month highs. December future contract of gold on Multi Commodity Exchange (MCX) finished ₹194 per 10 gm lower on Friday. Spot gold price logged intraday loss of 0.55 per cent and ended at $1,750 per ounce levels.
Markets record first weekly loss in five weeks on hawkish US Fed. Fears that the U.S. Federal Reserve will continue its policy of aggressive rate hikes. The benchmark S&P BSE Sensex.BSESN ended down 0.14% to 61,663.48 and NSE Nifty 50 index dropped 0.2% to 18,307.65.
S&P BSE Sensex slipped 0.17% to 61,876.93, as of 0346 GMT, after closing at an all-time high for the second straight session on Wednesday. Tata Motors fell 2.4% as it said its top boss at Jaguar Land Rover unit, Thierry Bollore, will resign due to personal reasons.
Morgan Stanley expects 2023 to be positive for emerging markets because there would be lower inflation, US Fed rate hikes will end and the US dollar should ease. Morgan Stanley is currently underweight on India but recognises the opportunity. The investment firm is positive on Indian financials when compared to its peers in the emerging market basket.
Michael Barr, the Fed's vice chair for supervision, said recent events in crypto... Have highlighted the risks to investors and consumers associated with new and novel asset classes and activities when not accompanied by strong guardrails. FTX, the third-largest crypto currency exchange, filed for bankruptcy Friday.
For the fourth time in a row, the US Federal Reserve raised its short-term borrowing rate by 75 basis points (bps), with the target range now at 3.75-4%. The ultimate takeaway for the stock market from this meeting is that investors must brace for smaller rate hikes from here on, and the terminal rates would be higher than previously anticipated.
The central bank will lower the quantum of interest rate hikes going ahead. Economists are now expecting the Fed to continue to raise interest to 5-5.25 percent by the end of March 2023 from current level of 3.75-4 percent. Traders are piling up bets that the Fed will be forced to cut interest rate by 25 basis points in march 2023 because of a recession in the US.
Benchmark indexes across Asia fall after the central bank raises key rate to the highest level in 15 years. The u.s. Government is due to release unemployment data Thursday and a report on the broader jobs market on Friday.
A 75-basis-point hike in federal funds rate would be the fourth consecutive time the central bank is hiking rates by that quantum. Investors across the globe would look for a guiding path on rates for the rest of the year and for 2023. Incoming data will remain critical for policy trajectory.
All eyes will be on the US Fed rate decision scheduled later this week. Fed could raise rates by 75 bps for the fourth time in a row. Wall street registers fourth straight week of gains. Dow rallies 800 points higher on Friday despite a tumble in Amazon shares after economic data pointed to slowing inflation.
The total crypto capitalisation (m-cap) hit the $1 trillion mark on Friday. Bitcoin, the largest by m-cap, crossed the $ 20,000 mark, and Ethereum was above the $ 1,500 mark for the first time since it concluded Merge in September. Experts said the current rise in the crypto prices was due to the expectations that the Federal Reserve (Fed) might soften its stance in fighting due to rising fears of.
The RBI is encumbered with a rather thankless task of maintaining fiscal stability while ensuring a fertile environment for growth. The global economy may soon be about to see a third phase of contraction since the 2009 Great Financial Crisis. However, many tend to forget that this inflation has been imported from the US.
The dollar index is at a multiyear high of 113 and the Rupee at 81. The 75-basis point hike with hawkish commentary by the US Fed spooked the sentiments of global markets. Global markets are fearing a recession in the US and Europe.
Analysts at ICICI Securities say the US may enter a recession by second quarter of FY23. On Thursday, the US Fed raised the rate by another 75 basis points. Analysts expect the next RBI policy and its action to smoothen the liquidity and talk about the current run in the currency.
The Sensex was down 337.06 points, or 0.57 percent, at 59,119.72 and the Nifty ended 88.50 points. The Fed turned more hawkish than anticipated, increasing its rate forecast to 4.4 percent by the end of 2022.
The Nifty was flat in afternoon trade after being down over 1% earlier in the session. The Fed increased rates by 75 basis points on Wednesday - the third such rise in a row, triggering a selloff in other markets. Investors can remain optimistic but be cautious since India’s valuations are on the higher side.
The Nifty 50 index ended 0.55% lower at 17,718.35, while the S&P BSE Sensex slipped 0.44% to 59,456.78. Investors fled risky assets after Vladimir Putin ordered a partial mobilisation of Russia's military reserves and accused the West of nuclear blackmail. Reuters reported that India's government was in no hurry to tamp down inflation back to the central bank's 4% medium-term target.
The federal reserve is poised to roll out another big increase in interest rates. It tries to cool the economy to tamp down the highest inflation in 40 years. Economists are expecting a third straight three-quarter point rate hike.
The central bank is set to announce its decision at the end of a two-day policy meeting later today. It is expected to raise the rates by another 75 basis points to a range of 3% to 3.25 per cent. The decision would be the third consecutive increase of that magnitude. Investors are looking beyond the key issue of inflation for other potential markets.
The central bank of Sweden , Sveriges Riksbank , announced a 100 basis points hike in interest rates. The bank justified the hike by noting that the average household was losing its purchasing power. Experts predict the US Fed will announce a hike of 75 basis points.
Investors bought what they could find their hands on, taking the benchmark indices higher. This was despite uncertainty over the quantum of US Fed policy hike. The index will consolidate and form a higher base to pave the way towards January 2022 high of 18,300 by October.
Analysts have reduced their third-quarter earnings forecast by 5.5% from June 30, which may result in the biggest fall in earnings since 2020’s second quarter. The index has decreased from its August level of 49 to a September level of 46, suggesting that real estate equities have also suffered.
The global are looking nervous after the US inflation numbers, which have caused the dollar index to hover around 110. The bank of England will also announce its interest rate decision. Institutional flows will play a critical role because foreign investors have turned sellers in the Indian equity market.
Sensex and Nifty have declined over 2.3 percent in the last three trading sessions. Investors are gearing up for a stronger interest rate hike by the US Fed.
Equities witnessed mayhem on Wednesday as the annual pace of price rise was more than economists’ median estimate of 8.1%. The US registered its biggest single-day loss in over two years, with the Nasdaq plunging 5% and Dow Jones 4% in Tuesday’s overnight trade.
The global markets too roiled with investors fearing a sharper hawkish stand by the US Fed in its upcoming meeting slated for September 20-21. The bulls, however, roared as the domestic benchmark indices displayed a stunning recovery from the lows.
Despite hawkish comments from US Fed officials, Indian stock market finished on second successive session last Friday. Nifty 50 index gained 34 points and ended at 17,833, the highest closing level of the 50 stocks index since 14th January 2022. BSE Sensex surged 104 points and closed at 59,793 levels whereas Nifty Bank index finished 206 points higher at 40,415 mark.
Global markets have been tanking over the last week after the US Fed chair’s speech. Despite a strong recovery, we were not yet in a bear market as the Nifty 50 had declined 18 per cent from peak to bottom, and not crossed 20 per cent threshold.
Indian rupee erased early gains to end Thursday's session on a slightly weaker note against the US dollar. Recovery in the greenback coupled with weak equities market performance globally weighed on sentiments. Volatility in markets returned this week due to a more hawkish than expected commentary from the US Fed. Global markets were also under pressure on fears of economic slowdown.
The US Fed policy action, RBI rate decision and foreign fund flows are some of the major factors that will guide the equity markets in the near-term, analysts said on Wednesday. September quarter earnings announcements would also pave the way for the markets, whose overall structure remains bullish, they added.
Samir Arora, founder and fund manager at Helios Capital, believes this might not just be a blip on radar and more selling may be in the offing. US Fed chairman Jerome Powell in an extremely hawkish speech said the Fed will keep raising rates for a while.
Sensex and Nifty fell over 2% today after US Fed chief's hawkish comments sparked a global selloff in equities. Fed chief Jerome Powell gave a clear message at Jackson Hole that interest rates will likely remain high for some time. India seems to be the only bright spot where inflation is relatively under control, Sanjiv Bhasin said.
Foreign portfolio investors intensified their investment into Indian equity market this month. They invested Rs 5,000 crore in Indian share market in July after consistently selling for nine consecutive months. In the coming months, FPI flows will depend on commodity prices and geopolitical concerns, corporate results and signs from the US Fed on interest rates movements.
About 120 central bankers, economists and academicians, among others, will gather in US Fed 's 45th annual Jackson Hole economic policy symposium in Wyoming, US. The focus of the symposium will be on “Reassessing Constraints on the Economy and Policy” Eyes would be on comments on the growth versus inflation debate, hard or soft landing of the US economy and timeline for rate cuts.
Despite weakness in European and some Asian markets due to hawkish US Fed on interest rate hike, Indian markets finished higher on Wednesday. Nifty 50 index gained 27 points and closed at 17,604 levels whereas BSE Sensex surged 54 points and finished at 59,085 mark. However, Nifty Bank outperformed benchmark indices and finished 340 points higher at 39,038 levels.
The Dow Jones Industrial Average fell more than 600 points in its worst day since June. The S&P 500 also tumbled 2%. Markets are apprehensive ahead of US Fed's Jackson Hole speech.
Dollar index up 0.22% at 106.89, its highest since late July. Minutes from the Federal Reserve's July meeting pointed to US interest rates staying higher for longer to bring down inflation. Sterling briefly dropped below the $1.2 level to a three-week low thanks to the stronger dollar.
All emerging markets, including India, are facing outflows of foreign portfolio investment as the US Fed tightens. Policy should respond to exchange rate fluctuations only after they affect inflation or output. But policymakers disagree as most EMs intervene in foreign exchange markets in order to reduce volatility. Excess volatility in financial variables hurts the real sector.
