The BSE benchmark dropped 131.43 points, or 0.16%, to settle at 82,948.23 on Wednesday (September 18, 2024).
| Photo Credit: Reuters

Benchmark equity indices Sensex and Nifty climbed to fresh record high levels on Thursday (September 19, 2024) in line with firm global trends after the U.S. Federal Reserve announced the first cut in policy rate in more than four years.

The 30-share Bombay Stock Exchange (BSE) Sensex climbed 236.57 points, or 0.29%, to settle at a lifetime high of 83,184.80. During the day, it jumped 825.38 points, or 0.99%, to scale an all-time intra-day high of 83,773.61.

The National Stock Exchange (NSE) Nifty gained 38.25 points, or 0.15%, to 25,415.80. During the day, it surged 234.4 points, or 0.92%, to hit a fresh intra-day record peak of 25,611.95.

From the 30 Sensex firms, NTPC, Nestle, Titan, Kotak Mahindra Bank, Maruti, Hindustan Unilever, Bharti Airtel, and HDFC Bank were the biggest gainers.

HCL Technologies, Tata Consultancy Services, Adani Ports, Larsen & Toubro, JSW Steel, State Bank of India, Tech Mahindra, and Bajaj Finance were among the laggards from the pack.

In Asian markets, Seoul, Tokyo, Shanghai, and Hong Kong ended in positive territory. European markets were quoting higher. The US markets ended lower on Wednesday (September 18, 2024).

“The benchmark indices concluded with a minor gain after hitting record highs post the US Fed’s more than expected interest rates cut of 50 bps and hinted for further reduction. The substantial rate cut sparked concerns over global slowdown, resulting in profit-booking in mid & small cap trading at premium valuation,” said Vinod Nair, Head of Research, Geojit Financial Services.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,153.69 crore on Wednesday (September 18, 2024), according to exchange data.

“The 50 bps rate cut is a bold stance by the US Fed to revitalise their subdued economy, which will in turn open the door for other global central banks, including the RBI, to kick-start the softer interest rate regime,” Vijay Bharadia, Founder, Wallfort Financial Services Limited, said.

Global oil benchmark Brent crude jumped 1.21% to $74.54 a barrel.

The BSE benchmark dropped 131.43 points, or 0.16%, to settle at 82,948.23 on Wednesday (September 18, 2024). The NSE Nifty also declined 41 points, or 0.16%, to close at 25,377.55.

Bombay Stock Exchange (BSE).
| Photo Credit: Reuters

Benchmark equity indices Sensex and Nifty surged to their fresh record high levels in early trade on Thursday after the U.S. Federal Reserve cut its benchmark interest rate after more than four years.

The 30-share BSE Sensex jumped 735.95 points to scale a new all-time high of 83,684.18 in early trade. The NSE Nifty also surged 209.55 points to hit a fresh record peak of 25,587.10.

“The big Fed rate cut by 50 bps has the potential to take equity markets into a consolidation phase with an upward bias. The rate cuts by the Fed will pave the way for rate cuts in India, too,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

More rate cuts are expected from the Fed, going forward, Vijayakumar added.

From the 30 Sensex firms, NTPC, Axis Bank, Tata Motors, Tata Consultancy Services, Bharti Airtel, Tech Mahindra, Infosys and HDFC Bank were the biggest gainers.

Bajaj Finserv emerged as the only laggard from the pack.

In Asian markets, Tokyo, Shanghai and Hong Kong rallied while Seoul quoted marginally lower.

The U.S. markets ended lower on Wednesday.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,153.69 crore on Wednesday, according to exchange data.

“The 50 bps rate cut is a bold stance by the U.S. Fed to revitalise their subdued economy, which will in turn open the door for other global central banks, including RBI to kick-start the softer interest rate regime,” Vijay Bharadia, Founder, Wallfort Financial Services Ltd, said.

Global oil benchmark Brent crude dipped 0.07% to $73.60 a barrel.

The BSE benchmark dropped 131.43 points or 0.16% to settle at 82,948.23 on Wednesday. The NSE Nifty also declined 41 points or 0.16% to close at 25,377.55.

Image used for representative purpose only.
| Photo Credit: ANI

Indian shares are set to open marginally higher on Thursday (September 19, 2024) as the U.S. Federal Reserve started its monetary easing cycle with a large 50-basis-point rate cut.

The GIFT Nifty was at 25,453.5 points as of 08:08 a.m. IST, indicating the NSE Nifty 50 will open slightly above its close of 25,377.55 on Wednesday.

The Fed cutting rates could boost the markets to record highs, two analysts said.

ALSO READ: Why rate cuts by the U.S. Federal Reserve matter to world markets

“This rate cut will facilitate inflows to emerging markets like India,” said Nilesh Shah, managing director at Kotak Mahindra Asset Management Company.

India’s information technology and pharma companies, which earn a significant share of their revenue from the U.S., will be in focus.

Other Asian markets rose, with the MSCI Asia ex-Japan index rising 0.25%.

Foreign institutional investors and domestic institutional investors net bought Indian stocks on Wednesday, purchasing ₹11.54 billion ($137.91 million) and 1.52 billion rupees of shares, respectively, according to provisional data from the National Stock Exchange of India.

People look toward the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., on September 18, 2024.
| Photo Credit: Reuters

The U.S. Federal Reserve cut its key lending rate by half a percentage-point Wednesday (September 18, 2024) in its first reduction since the pandemic, sharply lowering borrowing costs shortly before November’s presidential election.

Policymakers voted 11-to-1 in favor of lowering the U.S. central bank’s benchmark lending rate to between 4.75% and 5.00%, the Fed announced in a statement.

They also penciled in an additional half-point of cuts before the end of this year, and an added percentage point of cuts in 2025.

The Fed’s decision will affect the rates at which commercial banks lend to consumers and businesses, bringing down the cost of borrowing on everything from mortgages to credit cards less than two months before the U.S. Presidential election.

The Fed said its rate-setting committee “has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”

The central bank has a dual mandate from Congress to act independently to tackle both inflation and employment.

In updated economic forecasts published alongside the Fed’s rate decision, policymakers’ median forecasts pointed to an unemployment rate of 4.4%, on average, in the fourth quarter of this year, up from 4.0% in the last update in June.

Officials also penciled in an annual headline inflation rate of 2.3%, slightly lower than in June.