Indian Indices Gain as Markets Await US Fed's Decision

20 Mar 2024 , 01:37 PM

Indian benchmark indices witnessed gains on Friday, with markets globally awaiting the US Federal Reserve’s interest rate decision and commentary on potential rate cuts.

At the time of writing, Sensex surged by 317.63 points, or 0.44%, reaching 72,329.92, while Nifty climbed by 93.30 points, or 0.43%, hitting 21,910.60.

BSE Midcap and Smallcap indices maintained stability. Oil & gas and Telecom sectors observed a rise of 0.5% each, whereas the metal index experienced a decline of nearly 1%.

Crude oil prices exhibited a slight decrease today, attributed to profit-taking amid recent gains and anticipation of weekly oil inventory data, coupled with caution ahead of the US Fed meeting outcome.

Spot gold maintained stability at $2,156.78 per ounce, while U.S. gold futures remained unchanged at $2,159.80.

Foreign institutional investors (FIIs) were net buyers of shares valued at ₹1,421.48 Crore, while domestic institutional investors (DIIs) purchased stocks worth ₹7,449.48 Crore on March 19, as per provisional data from the NSE.

Wall Street surged to record highs earlier this month on the back of optimism surrounding artificial intelligence. However, the market has since pulled back slightly following reports indicating strong inflation, which have tempered expectations of an imminent interest rate cut by the Federal Reserve.

Amid anticipation of the Federal Reserve’s interest rate decision, other stocks also experienced minor declines.

In Europe, the Stoxx 600 index saw a 0.3% drop, while the Bloomberg dollar index extended its gains for the fifth consecutive session. Ten-year Treasury yields remained relatively stable at around 4.28%.

Analysts Win Thin and Elias Haddad at Brown Brothers Harriman suggest that while the Federal Reserve is expected to maintain rates for the fifth consecutive meeting, any hawkish commentary could further bolster recent increases in yields and the dollar.

Meanwhile, in Japan, the yen weakened to its lowest level against the euro since 2008 amidst speculation that the Bank of Japan will continue to pursue accommodative monetary policies despite ending its negative interest-rate regime. Against the dollar, the yen is approaching levels not seen since 1990.

In Asian markets, reports of Nvidia’s potential acquisition of Samsung Electronics Co.’s memory chips boosted the South Korean market, while Chinese equities rose in anticipation of key earnings reports, including from Tencent Holdings Ltd.

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