NIFTY CLOSES ABOVE 25,400 AMID VOLATILE TRADE, BROADER INDICES TUMBLE

The domestic equity benchmarks concluded a volatile trading session with modest gains on Thursday. The market was buoyed by the US Federal Reserve`s decision to cut interest rates by 50 basis points and its indication of further rate reductions. However, the substantial rate cut also sparked concerns about a potential global slowdown, leading to profit booking in mid-cap and small-cap stocks. The Nifty50 settled above the 25,400 level. Private banks and FMCG stocks were among the top performers, while media, energy, and public sector banks witnessed selling pressure. The volatility in the market was further amplified by the weekly expiry of futures and options contracts.

The S&P BSE Sensex rose 236.57 points or 0.29% to 83,184.80. The Nifty 50 index added 38.25 points or 0.15% to 25,415.80.

Titan Company (up 1.56%), HDFC Bank (up 0.81%) and Reliance Industries (up 0.45%) boosted the indices.

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

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 0.53% and the S&P BSE Small-Cap index dropped 1.06%.

The market breadth was weak. On the BSE, 1,235 shares rose and 2,721 shares fell. A total of 111 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, tumbled 6.74% to 12.47.

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.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper advanced 1.30% to 6.867 compared with its previous close of 6.779.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.6500, compared with its close of 83.7650 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement added 0.45% to Rs 73,382.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.01% to 100.59.

The United States 10-year bond yield rose 0.47% to 3.710.

In the commodities market, Brent crude for November 2024 settlement added 70 cents or 0.95% to $74.35 a barrel.

Global Markets:

Dow Jones Futures were up 472 points, indicating a strong opening in the US stock market today.

European shares advanced as investors digested the U.S. Federal Reserve�s first interest rate cut in four years.

The Bank of England kept interest rates at 5% following steady inflation in August. This comes after a quarter-point interest rate cut last month. BoE suggests it might lower rates again in November if economic conditions remain stable.

Asian stocks ended higher on Thursday as investors assessed the Federal Reserve`s rate-cut decision. Japanese shares climbed as the yen weakened ahead of the Bank of Japan`s policy meeting on Friday.

In China, investors await the central bank`s decision on the benchmark loan prime rate on Friday. Analysts generally expect no changes, given Beijing`s conservative approach to stimulus measures.

While the Fed`s rate cut provided a boost to regional markets, gains were tempered by the weak overnight performance on Wall Street. The outsized cut raised concerns about potential economic slowdown, leading to some cautious trading.

US stock market closed with modest losses and the dollar strengthened on Wednesday following the Fed`s rate cut. The S&P 500 declined by 0.29%, falling slightly below its all-time high. The Dow Jones Industrial Average and Nasdaq Composite also experienced minor losses. Trading in Tupperware Brands remained suspended after the company filed for Chapter 11 bankruptcy protection, sending its stock plummeting.

US retail sales, unadjusted for inflation, increased 0.1% in August after an upwardly revised 1.1% gain, pointing to healthy consumer demand that continues to underpin the economy. Excluding autos and gasoline stations, sales advanced for a fourth month.

Stocks in Spotlight:

Vodafone Idea (down 19.60%) and Indus Towers (down 8.8%) plummeted on Thursday following the Supreme Court`s rejection of a plea to re-compute adjusted gross revenue (AGR) dues. The court decision has dealt a significant blow to the struggling telecom sector. Vodafone Idea, which had previously reported an AGR liability of approximately Rs 70,300 crore, including accumulated interest, had argued for a reassessment of the amount and a reduction or waiver of the penalty. However, the Supreme Court, in its verdict, found no merit in the telecom companies` claims and dismissed their petitions.

The apex court`s ruling has put immense pressure on Vodafone Idea, which is already grappling with a gross debt of Rs 2.1 lakh crore. Of this, only a small portion is owed to banks and financial institutions, while the majority is payable to the government. The government dues, currently under moratorium until October 2025, will pose a substantial challenge to the telecom operator once the moratorium expires.

The decision has also impacted the shares of Indus Towers, which offers passive infrastructure services to mobile network operators and other wireless services providers.

Wockhardt hit an upper limit of 5% after the company said its investigational drug, Zaynich (Zidebactam/Cefepime), has successfully complex case of meningitis caused by pan-drug resistant super-bug under compassionate use. Meningitis, an inflammation of the tissues surrounding the brain and spinal cord, poses significant treatment challenges due to the difficulty of antibiotics in penetrating the blood-brain barrier.

Garden Reach Shipbuilders & Engineers (GRSE) shed 1.23%. 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. The value of the additional order is approximately $54 million.

Indian Renewable Energy Development Agency (IREDA) rose 1.21% after the PSU company informed that it has received approval of the Department of Investment and Public Asset Management (DIPAM) to dilute up to 7% government holding via qualified institutions placement (QIP) for Rs 4,500 crore.

Macrotech Developers added 1.26%. The real estate company has executed securities purchase agreements with Ivanhoe Warehousing India (Ivanhoe) for acquisition of their interest in the digital infrastructure platform entities Bellissimo Digital Infrastructure Development Management, Palava Induslogic 4 and Bellissimo In City FC Mumbai 1, in entirety at a consideration of Rs 239.56 crore.

The company`s interest post the above acquisition in Bellissimo Digital Infrastructure Development Management, Palava Induslogic 4 and Bellissimo In City FC Mumbai 1 would increase to 70%, 66.67% and 66.67%, respectively

Ion Exchange (India) advanced 3.04% after the company announced that it secured contracts worth Rs 161.19 crore from Adani Power for comprehensive & complete total water & environment management solution.

DCX Systems gained 2.29% after the company announced that the company received export orders from Elta Systems, Israel for supply electronic modules. The total cost of order is $18,495,779.10, equivalent to Rs 154.80 crore.

360 One Wam declined 1.21%. The firm said that its board has approved raising of funds by issue of equity shares, for an aggregate amount not exceeding Rs 2,250 crore, through Qualified Institutions Placement (QIP) route.

Tilaknagar Industries advanced 2.43% after the company�s board has approved an investment of Rs 8.03 crore in Round the Cocktails (Bartisans) through a mix of primary investment and secondary acquisition. The company will hold 36.17% stake in Bartisans on a fully diluted basis, following a combination of primary funding and secondary share acquisition.

Power Mech Projects shed 0.47%. The company received an order for operation and maintenance (O&M) of thermal power plant of Talwandi Sabo Power (a subsidiary of Vedanta) worth Rs 865 crore.

CESC fell 1.59%. The company said that its subsidiary Purvah Green Power has entered into a binding term sheet with Ecoren Energy India for setting up wind power project of up to 686.85 MW.

IPO Update:

The initial public offer (IPO) of Western Carriers (India) received bids for 63,35,25,909 shares as against 2,08,68,467 shares on offer, according to stock exchange data at 17:00 IST on Thursday (19 September 2024). The issue was subscribed 30.36 times.

The issue opened for bidding on Friday (13 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 163 to Rs 172 per share. An investor can bid for a minimum of 87 equity shares and in multiples thereof.

Northern Arc Capital`s IPO received bids for 2,37,66,37,800 shares as against 2,14,78,290 shares on offer, according to stock exchange data at 17:00 IST on Thursday (19 September 2024). The issue was subscribed 110.65 times.

The issue opened for bidding on Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 249 to 263 per share. An investor can bid for a minimum of 57 equity shares and in multiples thereof.

Arkade Developers` IPO received bids for 2,52,40,96,740 shares as against 2,37,75,719 shares on offer, according to stock exchange data at 17:00 IST on Thursday (19 September 2024). The issue was subscribed 106.16 times.

The issue opened for bidding Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 121 to 128 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.

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