Sensex, Nifty like to open positive, Fed hints at rate cut

1 Aug 2024 , 09:03 AM

Indian benchmark indices, the Sensex and Nifty 50, are expected to open higher on August 1, with Nifty futures trading at 25,091 at 07:00 AM IST. This follows a positive close in the previous session, driven by gains in European and Asian markets ahead of the US Federal Reserve’s interest rate decision.

At the close on July 31, the Sensex rose 0.35%, gaining 286 points to reach 81,741, while the Nifty 50 Index increased by 0.38% to settle at 24,951.15 points. Among sectoral indices, Nifty Metal was the top performer, rising 1.2%, followed by Nifty Pharma and Media, which each gained over 1%. In contrast, Nifty PSU Bank and Nifty Realty were the only sectors to decline, both down by 0.4%.

Asian markets showed mixed results on Thursday, reacting to comments from US Federal Reserve Chair Jerome Powell, who hinted at a possible rate cut in September if inflation data remains favorable. This sentiment boosted US markets, with the S&P 500 and Nasdaq recording their largest daily percentage gains since February 22. The Dow Jones Industrial Average also rose, buoyed by a rally in chip stocks and the Federal Reserve’s decision to keep interest rates unchanged while suggesting potential easing in September.

The Fed maintained its benchmark overnight interest rate in the 5.25%-5.50% range and indicated the possibility of easing monetary policy if inflation trends positively. The yield on the benchmark US 10-year note fell by 9.8 basis points to 4.043%.

In terms of market performance, the Dow Jones Industrial Average increased by 0.24% to 40,842.79, the S&P 500 gained 1.58% to 5,522.30, and the Nasdaq Composite advanced 2.64% to 17,599.40. Foreign institutional investors (FIIs) continued their selling spree, offloading equities worth ₹3,462 Crore on July 31, while domestic institutional investors (DIIs) bought equities worth ₹3,366 Crore on the same day.