NIFTY ABOVE 25,500; FMCG SHARES IN DEMAND; VIX SLUMPS 8.20%

The domestic equity benchmarks traded with decent gains in morning trade. The Nifty traded above the 25,500 level. FMCG shares advanced after the declining in the previous trading session.

At 10:30 ST, the barometer index, the S&P BSE Sensex was advanced 514.67 points or 0.63% to 83,474.66. The Nifty 50 index added 192.45 points or 0.76% to 25,570.00.

The Sensex and Nifty clocked an all-time high of 83,773.61 and 25,611.95 respectively in morning trade.

In the broader market, the S&P BSE Mid-Cap index fell 0.55% and the S&P BSE Small-Cap index declined 0.98%.

The market breadth was weak. On the BSE, 1,318 shares rose and 2,295 shares fell. A total of 167 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, slumped 8.02% to 12.30.

Economy:

Fed Cuts Rates for the First Time in Years, Signaling Policy Shift:

The US Federal Reserve made a significant policy shift on Wednesday, reducing interest rates by 50 basis points. This marks the first rate cut in over four years, signaling a potential easing of the restrictive monetary policy implemented to combat inflation. The Federal Open Market Committee (FOMC) justified the decision, citing progress in curbing inflation and a shifting balance of risks. The rate cut is expected to lower borrowing costs for consumers and businesses, stimulating spending and investment.

While the 50-basis point cut was at the higher end of market expectations, analysts anticipate further rate reductions in the coming months. The Fed hinted at two more 25-basis point cuts this year, but market sentiment suggests more aggressive easing could be on the horizon. Despite the optimism surrounding rate cuts, Federal Reserve Chair Jerome Powell tempered expectations. He emphasized that the central bank does not intend to return to the era of ultra-low interest rates seen during the COVID-19 pandemic. Powell indicated that the Fed`s neutral rate is likely to be higher than in the past, suggesting a less accommodative monetary policy stance going forward.

The Fed`s rate cut will have global repercussions, particularly in emerging markets like India. Lower interest rates in the US can influence capital flows and exchange rates, affecting these economies` financial conditions.

Buzzing Index:

The Nifty FMCG index rose 1.04% to 65,288.60. The index shed 0.11 % in the past trading session.

United Breweries (up 3.35%), Balrampur Chini Mills (up 2.4%), Tata Consumer Products (up 1.8%), ITC (up 1.3%) and Britannia Industries (up 0.94%), Radico Khaitan (up 0.79%), Nestle India (up 0.79%), Hindustan Unilever (up 0.79%), Godrej Consumer Products (up 0.76%) and Dabur India (up 0.73%) edged higher.

On the other hand, Marico (down 0.36%), Colgate-Palmolive (India) (down 0.15%) and Varun Beverages (down 0.05%) edged lower.

Stocks in Spotlight:

Garden Reach Shipbuilders & Engineers (GRSE) added 1.61% after the firm has signed a contract with Carsten Rehder Schiffsmakler and Reederei GmbH & Co., KG Germany for construction and delivery of additional 4 multi-purpose vessels.

Nazara Technologies declined 3.51%. The company raised up to Rs 900 crore via preferential issue of shares at an issue price set at Rs 954.27 per share. Meanwhile, the company will acquire an additional 19.35% stake in Absolute Sports (Sportskeeda) for Rs 145.5 crore. With this, the company now holds a 91% ownership stake in Abosulte Sports (Sportskeeda).

Powered by Capital Market - Live News