Nifty fails to hold 25,450 mark; European mkt opens higher

The headline equity benchmarks pared most of the gains and traded in positive territory in afternoon trade. The Nifty traded below the 25,450 mark after hitting record high of 25,611.95 in morning trade. FMCG, bank and private bank shares advanced while media, oil & gas and PSU bank shares declined. Trading was volatile due to weekly F&O series expiry today.

At 13:30 IST, the barometer index, the S&P BSE Sensex rose 197.17 points or 0.24% to 83,144.40. The Nifty 50 index added 26.25 points or 0.10% to 25,403.80.

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 1.37% and the S&P BSE Small-Cap index declined 1.60%.

The market breadth was weak. On the BSE, 1,020 shares rose and 2,846 shares fell. A total of 125 shares were unchanged.

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.

Gainers & Losers:

NTPC (up 2.46%), Nestle India (up 2.07%), Maruti Suzuki India (up 1.40%), Bharti Airtel (up 1.33%) and Tata Consumer Products (up 1.16%) were major Nifty gainers.

Bharat Petroleum Corporation (down 2.84%), Adani Ports and Special Economic Zone (down 1.91%), Oil & Natural Gas Corporation (down 1.79%), Shriram Finance (down 1.77%) and Coal India (down 1.56%) were major Nifty losers.

Stocks in Spotlight:

Garden Reach Shipbuilders & Engineers (GRSE) shed 0.87%. 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.

Macrotech Developers shed 0.34%. The company said that it has executed securities purchase agreements with Ivanhoe Warehousing India Inc. for acquisition of their interest in the digital infrastructure platform entities in Maharashtra for Rs 239.56 crore. It will acquire 10% equity stake and other securities of Bellissimo Digital held by Ivanhoe for Rs 14.77 crore. Post the acquisition, the company's equity stake in Bellissimo Digital will increase from 60% to 70%.

Indian Renewable Energy Development Agency (IREDA) rose 1.02% 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.

Tilaknagar Industries advanced 2.56% after the company's board has approved an investment of Rs 8.03 crore in Round the Cocktails Private (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.

DCX Systems gained 2.62% 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 0.34%. 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.

Global Markets:

Dow Jones Futures were up 270 points, indicating a positive opening in the US stock market today.

European and Asian stocks advanced on Thursday as investors assessed the Federal Reserve's decision to cut interest rates by a half-percentage point. Japanese shares climbed as the yen weakened ahead of the Bank of Japan's policy meeting on Friday. The Bank of England is also scheduled to announce its monetary policy decision later in the week.

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.

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.

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.

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