Indian Market Opens Lower, Responding to Wall Street Decline and Fed’s Interest Rate Decision

Indian Market Opens Lower, Responding to Wall Street Decline and Fed's Interest Rate Decision
Indian Market Opens Lower, Responding to Wall Street Decline and Fed's Interest Rate Decision
Indian Market Opens Lower, Responding to Wall Street Decline and Fed's Interest Rate Decision
Indian Market Opens Lower, Responding to Wall Street Decline and Fed's Interest Rate Decision

Indian Market Opens Lower, Responding to Wall Street Decline and Fed’s Interest Rate Decision

Indian Market Opens Lower, Responding to Wall Street: Decline and Fed’s Interest Rate Decision

The Indian market took a cue from the overnight decline on Wall Street and commenced the trading day in the red. Benchmark indices began the day more than half a percent lower, reflecting global economic concerns and the recent decisions by the Federal Reserve.

Fed Keeps Interest Rate Steady

The Federal Reserve held its main interest rate steady at its highest level in more than two decades, as widely anticipated. Fed officials also indicated the possibility of one more interest rate hike later this year, as they aim to control inflation and maintain a target rate of 2%. Fed Chair Jerome Powell mentioned that the peak on rates is close or may have already been reached.

India’s Revised GDP Growth Estimate

In a positive development for the Indian economy, India Ratings and Research revised its GDP growth estimate for FY24 from 5.9% to 6.2%. This upward revision is attributed to sustained government capital expenditure, the improved balance sheets of corporates and the banking sector, and the potential for a new private corporate capital expenditure cycle.

Rising US Bond Yields and Oil Prices

US 10-year bond yields reached a 16-year high, while Brent crude oil prices hovered around $96 per barrel, marking a substantial increase of about one-third over the past three months. This surge in oil prices followed production cuts by OPEC+, a coalition of oil-producing nations.

Stock Market Highlights

  • EMS Ltd. made a strong debut on the stock exchanges, with its share price listing at a significant premium of 33.7% on the NSE, trading at ₹282.05 per share. On the BSE, EMS shares were listed at ₹281.55 per share.
  • Meson Valves India Ltd., a valve and flow control product manufacturer, had an impressive market debut, with its shares trading at ₹193.80 apiece on the BSE SME platform, representing a substantial premium of 90% compared to its issue price of ₹102 per share.
  • HDFC Bank’s share price continued to decline for the third consecutive session, experiencing a drop of up to 1.65% and reaching ₹1,538.05 per share on the BSE. The stock had faced substantial selling pressure during the week, resulting in a loss of more than 7%.

Market Expert Analysis

  • Avdhut Bagkar, Derivatives & Technical Research (Institutional) at Stoxbox, provided insights into the market outlook. He emphasized that the Nifty 50 index’s support at 19,600 marks a critical level, and a breakdown could lead to further declines. Conversely, a breakout above 20,000 may signal a reversal of the bearish trend.
  • Deven Mehata, Equity Research Analyst at Choice Broking, suggested that the Sensex and Nifty indices might experience a slight decline on September 21st. He noted negative signals from the GIFT Nifty and emphasized the importance of maintaining levels within the range of 19,800 to 19,950 for market sentiment.

Stock-Specific Approaches Advised

Given the absence of clear trends in both Nifty and Bank Nifty, market participants are encouraged to adopt a prudent, stock-specific approach, considering the evolving market conditions and factors influencing individual stocks.

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