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Markets hit fresh record high in early deals after US Fed slashes interest rates by 50 bps
Sep-19-2024

Indian equity benchmarks made optimistic start on Thursday and hit lifetime highs following the US Federal Reserve’s decision to cut policy rates by a widely expected 50bps. The Federal Open Market Committee (FOMC) cut its policy rate by half a percentage point to a target range of 4.75 per cent to 5 per cent. At this point of trade, Sensex and Nifty are trading in fine-fettle with gains of over 0.80% each amid foreign fund inflows. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,153.69 crore. Sentiments got boost as net direct tax collection grew 16.12 per cent to over Rs 9.95 trillion so far this fiscal on higher advance tax mop up. Refunds worth over Rs 2.05 trillion were issued, a 56.49 per cent jump over the same period last fiscal. Traders took encouragement as Commerce and Industry Minister Piyush Goyal expressed optimism that India's merchandise and services exports will surpass $825 billion despite facing global economic challenges. 

On the global front, Asian markets are trading mostly higher, despite the broadly negative cues from Wall Street overnight, as the markets react to the US Fed's decision to lower interest rates for the first time in over four years, aggressively slashing rates by half a percentage point. Fed officials also suggested the central bank will cut rates by another 50 basis points by the end of the year. 

Back home, pharmaceutical stocks are in focus as a report by CRISIL Ratings stated that the Indian pharmaceutical sector is expected to see revenue growth of 8-10 per cent this financial year, driven by strong exports to regulated markets such as the US and Europe, a recovery in semi-regulated markets including Africa and Asia, and consistent domestic demand. In stock specific development, NTPC traded with traction ad it filed for an IPO of its green energy arm, NTPC Green Energy, with an aim to raise around $1.2 billion (Rs 10,000 crore). Aditya Birla Capital climbed after the RBI approved the merger of Aditya Birla Finance with the company. 

The BSE Sensex is currently trading at 83655.68, up by 707.45 points or 0.85% after trading in a range of 83332.09 and 83773.61. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.10%, while Small cap index was down by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 1.21%, Utilities up by 1.16%, Auto up by 1.07%, Power up by 0.99% and TECK up by 0.91%, while Oil & Gas down by 0.54%, Industrials down by 0.19%, Capital Goods down by 0.18% and Energy down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.85%, Titan Company up by 1.64%, Axis Bank up by 1.46%, Bharti Airtel up by 1.43% and Maruti Suzuki up by 1.22%. On the flip side, HCL Technologies down by 0.35% was the sole loser.

Meanwhile, expressing optimism over India’s exports growth, the Commerce and Industry Minister Piyush Goyal has said that the country's merchandise and services exports will cross $825 billion despite global challenges. Last year, the exports were $778 billion. He also said that there are plans to open offices in different countries including Singapore, Dubai, Saudi Arabia, possibly one in New York, Silicon Valley, and one in Zurich as part of the Indian government's outreach programme to handhold foreign investors. He said the plan is that through these offices, a person sitting anywhere in the world can buy land in India, can see that piece of land, take all approvals through a single window platform and resolve issues, if any, through video conference. He added it would make it easy to invest in India and do business in India. 

On exports, he said that the current geo-political situation affects everything including trade, economy, interest rates, stock market, and shipping routes. He informed that the commerce ministry is holding a meeting with the shipping industry to look at issues like container shortages, skyrocketing freight rates and how to reduce the impact of the Red Sea crisis. These issues are hurting Indian exporters and importers. According to the government data, India's exports registered a steepest decline in 13-month falling 9.3% in August to $34.71 billion due to global economic uncertainties, while the trade deficit soared to a 10-month of $29.65 billion. Imports increased by 3.3% to $64.36 billion, which is a record high, due to a significant jump in the inbound shipments of gold and silver.

He also said that to attract investments and boost domestic manufacturing, he is meeting countries like Japan, Singapore and Switzerland to set up units in Indian industrial townships. The cabinet has recently approved 12 such townships in states like Bihar, Andhra Pradesh and Maharashtra. Besides, four have already been developed and work is undergoing in four other industrial cities. India is developing modern infrastructure, common effluent facilities, and providing utilities like water, power, digital connectivity in these townships. He further said that the countries are recognising that when India is buying oil from Russia due to sanctions on countries like Iran, and Venezuela, it is helping stabilise the world market. He also said that the commerce and industry ministry is looking at ways to promote trade and investments through national investment promotion agency Invest India.

The CNX Nifty is currently trading at 25581.85, up by 204.30 points or 0.81% after trading in a range of 25481.70 and 25611.95. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.86%, Bajaj Auto up by 2.17%, LTIMindtree up by 1.69%, Titan Company up by 1.68% and Grasim Industries up by 1.55%. On the flip side, BPCL down by 1.10%, ONGC down by 0.79%, HCL Technologies down by 0.32%, Cipla down by 0.25% and Bajaj Finserv down by 0.17% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 906.15 points or 2.49% to 37,286.32, Hang Seng jumped 318.81 points or 1.81% to 17,978.83, Taiwan Weighted rose 266.77 points or 1.23% to 21,945.61, Jakarta Composite gained 55.31 points or 0.71% to 7,884.45, Straits Times advanced 25.8 points or 0.72% to 3,618.22 and Shanghai Composite was up by 16.1 points or 0.59% to 2,733.38, while KOSPI was down by 2.12 points or 0.08% to 2,573.29.
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