On Thursday, September 18, equity benchmark indices Sensex and Nifty 50 are expected to open higher after the US Federal Reserve decided to cut interest rates by 25 basis points (bps) as anticipated. At 7:17 AM, the GIFT Nifty was trading near 25,500, up by 77 points.
On September 17, the US Federal Reserve cut the benchmark rate by 25 bps to 4%–4.25%, citing labour market stress, and signalled future moves will depend on economic data.
The Summary of Economic Projections (SEP) still shows two more interest rate cuts for 2025.
Asian markets traded mostly higher, while the US stock market ended mixed overnight after the Fed policy.
The domestic market is expected to continue its upward trend, supported by progress in trade talks and buoyant sentiment from Asian peers.
On Wednesday, September 17, Foreign Institutional Investors (FIIs) were net sellers. FIIs sold equities worth ₹1,124.54 crore.
Domestic Institutional Investors (DIIs) were buyers on Wednesday. They bought shares worth ₹2,293.53 crore on the same day. DIIs have been net buyers for the past 17 consecutive trading sessions.
The NSE Nifty 50 ended 0.36% higher at 25,330.10, while the S&P BSE Sensex gained 313 points, or 0.38%, to 82,694.
Bank Nifty also advanced, settling at 55,493.30, up 0.63%. Sector-wise, Auto, IT, and Oil & Gas stocks recorded gains. In the broader markets, mid-cap stocks registered marginal gains, whereas small-caps rose by as much as 0.68%.
US stocks closed mixed on Wednesday in a volatile session after the Federal Reserve announced an expected 25-basis-point rate cut. Fed Chair Jerome Powell emphasised signs of weakness in the labour market during his remarks. The Dow managed to end higher after swinging between gains and losses, while both the Nasdaq and S&P 500 slipped.
The Fed indicated it will maintain a path of gradual easing, projecting two more quarter-point cuts later this year as policymakers flagged labor market pressures.
The Dow Jones Industrial Average advanced 260.42 points, or 0.57%, to 46,018.32. The S&P 500 edged down 6.41 points, or 0.10%, to 6,600.35, and the Nasdaq Composite fell 72.63 points, or 0.32%, to 22,261.33.
At the press conference, Powell stressed that employment risks have now become more significant than inflation, though inflation concerns remain under review. Market participants had largely anticipated the cut, according to LSEG data.
China’s central bank left the borrowing cost of its seven-day reverse repurchase agreements unchanged. The People’s Bank of China (PBOC) injected 487 billion yuan ($68.56 billion) worth of seven-day reverse repos through open market operations, keeping the rate steady at 1.40% from the previous operation.
Gold prices slipped on Thursday as the US dollar strengthened following the anticipated Federal Reserve rate cut, coupled with cautious comments on future policy moves. Spot gold declined by 0.2% to $3,653.54 per ounce, after touching an all-time high of $3,707.40 in the previous session.
WTI crude oil futures fell below $64 per barrel and Brent crude oil futures fell below $67 per barrel on Thursday, extending losses from the previous session, as traders continued to assess US stockpile data and a Federal Reserve rate cut.
The US dollar index dropped to its lowest level since February 2022, at 96.224, against a basket of major peers immediately after the rate decision, but bounced back to end the day higher at 97.074.
Disclaimer: The article is for informational purposes only and not investment advice.
For android only