Indian stock market: 8 key things that changed for market overnight - Gift Nifty to US Fed rate cut

Indian stock market: The domestic equity benchmark indices, Sensex and Nifty 50, are expected to open higher on Thursday after the US Federal Reserve announced a higher than expected interest rate cut.

Asian markets traded higher, while the US stock market ended slightly lower overnight after the Fed’s outsized rate cut, which was largely anticipated.

US Federal Reserve kicked off its monetary easing cycle with a larger-than-usual half-percentage-point rate reduction citing a “greater confidence” that inflation was moving toward the central bank’s 2% target.

Markets are now fully pricing in a cut of at least 25 basis points at the Fed’s November meeting, with a roughly 35% chance for another 50 basis point cut, Reuters reported.

On Wednesday, the Indian stock market indices ended choppy session lower amid cautiousness ahead of the crucial US Fed monetary policy meeting.

The Sensex fell 131.43 points, or 0.16%, to close at 82,948.23, while the Nifty 50 settled 41.00 points, or 0.16%, lower at 25,377.55.

“Investors turned cautious ahead of the US Fed policy meeting outcome. We expect the market to remain volatile in the near term with rate-sensitive sectors in focus,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded higher on Thursday led by a rally in Japan’s Nikkei after a bumper interest rate cut by the US Federal Reserve.

The Nikkei rose 2.1%, while the Topix surged 1.9%. South Korea’s Kospi gained 0.57% and the Kosdaq added almost 1%. Hong Kong’s Hang Seng index futures indicated a flat opening. Futures of mainland China’s CSI 300 were marginally lower than its Tuesday’s close.

Gift Nifty Today

Gift Nifty was trading around 25,400 level, a premium of nearly 30 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices.

Wall Street

US stock market ended with modest losses on Wednesday, well off their intraday highs, after the US Fed rate cut.

The Dow Jones Industrial Average declined 103.08 points, or 0.25%, to 41,503.10, while the S&P 500 fell 16.32 points, or 0.29%, to 5,618.26. The Nasdaq Composite closed 54.76 points, or 0.31%, lower at 17,573.30.

Russell 2000 surged as much as 2.44% before closing up 0.04% on the day and the KBW Regional bank index jumped as much as 3.53% before closing up 0.46%.

US Fed Rate Cut

The US Federal Reserve cut the benchmark interest rate by 50 basis points (bps) to a range of 4.75% to 5.00% from 5.25% to 5.5%. The US Fed Chair Jerome Powell-led FOMC sees the federal fund rates falling by another 50 bps by the end of this year, another full percentage point in 2025, and a final half-point reduction in 2026 to end in a 2.75% - 3.00% range.

US Housing Starts

US single-family homebuilding rebounded sharply in August, but building permits increased moderately. Single-family housing starts, which account for the bulk of homebuilding, surged 15.8% to a seasonally adjusted annual rate of 992,000 units last month. Data for July was revised higher to show starts at a rate of 857,000 units instead of the previously reported 851,000 pace.

Dollar

The US dollar rose broadly on Thursday, recovering from an earlier tumble after the US Fed’s outsized interest rate cut. Against the yen, the greenback gained 0.58% to 143.12. The euro fell 0.04% to $1.1113 and Sterling fell 0.11% to $1.3199.

Gold Rate Today

Gold prices traded flat on Thursday as investors digested Fed Chair Jerome Powell’s comments after the super-sized rate cut by the US central bank. Spot gold was little changed at $2,558.00 per ounce. Bullion rose to a record high of $2,599.92 on Wednesday before closing lower, Reuters reported. US gold futures fell 0.6% to $2,582.70.

Crude Oil Prices

Crude oil prices fell after a larger-than-expected US Fed rate cut sparked concerns about the US economy.

Brent crude futures for November declined 0.46% to $73.31 a barrel, while WTI crude futures for October fell 0.59% to $70.49 a barrel.

(With inputs from Reuters)

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