BackIndian stock market: 7 key things that changed for market overnight - Gift Nifty, US Fed to China’s loan prime rates
Indian stock market: Gift Nifty was trading around the 21,910 level, a premium of nearly 22 points from the Nifty futures’ previous close, indicating a mildly positive start for the Indian stock market indices.
PremiumIndian stock market: The domestic equity indices are expected to open on a cautious note Wednesday and may see a bounce back from a sharp slide in the previous session, amid positive global market cues.
Asian markets traded higher while the US stock market ended in the green overnight ahead of the US Federal Reserve’s interest rate decision later today.
China kept its loan prime rates unchanged and the Bank of Japan announced a landmark shift in monetary policy, raising interest rates for the first time in 17 years and scrapping its yield curve control policy.
On Tuesday, the Indian stock market indices closed with significant losses amid selling across the board as investors remained cautious following the Bank of Japan’s decision to raise interest rates for the first time in 17 years, ending eight years of negative interest rates policy.
The Sensex cracked 736.37 points, or 1.01%, to end at 72,012.05, while the Nifty 50 settled 238.25 points, or 1.08%, lower at 21,817.45.
“We expect the market to remain in consolidation mode as cautiousness persists with the commencement of the US Fed meeting. While the US Fed is likely to maintain its stance and keep the rate unchanged, its commentary will hold importance as it would provide insights into the central bank’s future rate action," 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 Wednesday tracking overnight gains on Wall Street.
Japanese markets are closed for a public holiday. South Korea’s Kospi rose 1.12% and the Kosdaq gained 0.34%. Hong Kong’s Hang Seng index futures indicated a stronger opening.
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Gift Nifty Today
Gift Nifty was trading around the 21,910 level, a premium of nearly 22 points from the Nifty futures’ previous close, indicating a mildly positive start for the Indian stock market indices.
Wall Street
US stock market indices ended higher on Tuesday led by energy and tech stocks, while investors looked ahead to the Federal Reserve’s policy meeting for clues on interest rate policy.
The Dow Jones Industrial Average gained 320.33 points, or 0.83%, to 39,110.76, and the S&P 500 rose 29.09 points, or 0.56%, to 5,178.51. The Nasdaq Composite closed 63.34 points, or 0.39%, higher at 16,166.79.
Among stocks, Nvidia shares gained 1%, Home Depot shares rose 2%, while McDonald's and Apple share price rallied more than 1% each.
Coinbase Global shares fell almost 4% while Riot Platforms declined almost 3%. MicroStrategy stock price plunged 5.7% and Super Micro Computer shares tumbled just under 9%. Spire Global shares jumped 30.4%.
China Lending Rates
The People’s Bank of China kept its benchmark lending rates unchanged at a monthly fixing on Wednesday, in line with market expectations. The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 3.95%.
US Fed Meet Begins
The meeting of the US Federal Reserve’s rate-setting Federal Open Market Committee (FOMC) began on Tuesday and will announce its interest rate decision today. Following two days of debate, the US Fed is widely expected to keep federal fund rates unchanged in a range of 5.25% to 5.5%, a two-decade high first reached in July.
The US Federal Reserve Chairman Jerome Powell in his speech could provide additional clues about how much it will cut interest rates this year.
Robust inflation data in the US has pulled back bets for the first rate cut by the Fed in June to about 59% from about 69% at the start of last week, according to the CME FedWatch Tool, Reuters reported.
Yen Near Four Month Low
The Japanese yen languished near a four-month low against the US dollar and a 16-year trough against the euro on Wednesday, a day after the Bank of Japan decided to end its negative interest rate policy and announced its first rate hike in 17 years.
On Wednesday, the yen weakened to a four-month low of 151.34 per dollar and was last off 0.30% at 151.28. Against the euro, yen weakened to 164.35, its lowest since 2008, while against the pound, yen weakened to 192.37, its lowest since 2015, Reuters reported.
Oil Prices
Crude oil prices traded lower after a two-day gain. Brent crude futures for May delivery fell 0.2% to $87.19 a barrel, while US West Texas Intermediate futures for April delivery declined 0.4% to $83.12 a barrel.
US Dollar, Treasury Yields
US Treasury yields fell on Tuesday from their near-February highs. The benchmark 10-year notes’ yields fell by 3 basis points (bps) to 4.308%, while the two-year yields ticked down to 4.704%.
The dollar index, which measures the US currency against six rivals, rose to 0.019% to 103.87.
(With inputs from Reuters)
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