Fed Cut Rates by 50 BP, In Line With Our Expectations

The Indian market witnessed moderate volatility along with de-synchronised movement in indices. As discussed in previous report, the NIFTY index witnessed heavy profit taking just below 25500 mark and dropped below 25300 during the intraday closing, settled down 41 points.

The bank nifty on the other hand witnessed sharp buying as IT slide. After an indecisive close in the previous session, the BNF index rose breaking the resistance of 52300-340 and advanced till 52954.

However, witnessed some liquidation during the closing bell, still settled up 1.08% or 561 points. The major dragger for the market was IT stocks ahead of Fed meeting which saw heavy profit taking before the rate decision from the Feb. 

The IT index slide over 3% today with all 10 stocks in the index closed negative. The highest looser was Mphasis which fell over 5.63%. Tech heavy TCS lost 3.5% and Infosys dropped over 3.08%.

The breadth of the larger market was negative with NIFTY 500 index slide 0.3% with 358 declines and only 143 advances. The midcap select index which caters to 25 selective midcaps witnessed heavy liquidation and dropped below the previous day’s low. The index formed a sharp red candle posting an intraday low of 13049 to settle at 13132, down 1.13%.

Business and economic Developments

· Aavas Financiers approves non-convertible debentures issue for ₹630 crore. The NCD shall be on private placement and shall be listed on the Wholesale Debt Market Segment (WDM) of BSE.

· Like Big billion-dollar season, Cleartrip is planning to provide deep discounts during the festive season with great deals on flights, hotels, buses, and holiday packages.Airfares on domestic routes will be available at ₹999and Children can fly with family for free.

· National Green Tribunal (NGT) has sought reply from Union Ministry of Road Transport and Highways, Bureau of Indian Standards regarding the use of cancer-causing chemicals in cars. The NGT was hearing a matter where it had taken suomotu cognisance of a media report regarding the use of TDCIPP and TCEP which were carcinogenic.

· Ion Exchange wins ₹161-crore contract from Adani Power for water and environment solutions

· IREDA aims for ₹3.5 lakh crore book size by 2030, highlights asset quality improvement. On other developments, the DIPAM approved dilution of up to 7% of the government's shareholding in IREDA, due to the issue of fresh equity through the Qualified Institutional Placement (QIP) route.

· Nazara Technologies to raise ₹900 crore via preferential issue.

· Anil Ambani's Reliance Infrastructure and Reliance Power slash debt by a cumulative ₹7,220 crore.

·  GE T&D India promoters to sell 11.7% stake via OFS at ₹1,400 per share. OFS is open today for Non-retail investors and 20^th Sep for retail investors. The share of the company closed at 1700 rupees.

· Bandhan Bank hikes fixed deposit rates. The bank is Bank offering 8.55% to senior citizens for on one-year FDs and for non-senior customers, the rate stands at 8.05%. The increase is 80bp from the previous rates.

· Power Grid declared as successful bidder to establish inter-state transmission system. Project comprises establishment of new 765/400/220kV sub-station at Kurawar, Madhya Pradesh

· Allcargo Logistics August LCL Volume Up 1% MoM & Up 5% YoY. All cargo shared closed up 0.75% at 67.39 today.

·  Garden Reach Shipbuilders gets order worth $54 million for four multi-purpose vessels from Carsten Rehder Schiffsmakle. The share of the company last traded at 1705 on NSE.

The FOMC meeting:The US fedcutthe benchmark target rate by 50 basis point 4.75-5 per cent. After the meeting, US Fed Chair Jerome Powell said the US economy is strong overall and the labour market has cooled while the inflation has substantially eased.

US Fed see that the benchmark fed funds target rate 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 per cent-3.00 per cent range.

Asian markets traded positive this morning post the meeting outcome. The NIKKEI Index advanced over 2.45% while Hang Sang gained around 0.05%, at the time of writing. The GIFT NIFTY future was trading up by 14 points indicating flat to positive opening.

Market Outlook - Index

NIFTY:Despite the positive event one should be careful with the index. The immediate support for NIFTY is pegged at 25280-300 range and resistance at 25450-480 range.

BANK NIFTY:The bank nifty may face resistance at 52900-950 range with immediate support a 52500 and then 52260-300 range.

NIFTY MIDCAP Select Index:the index looks weak on chart however has important base at 13050 and then at 13000 levels. The immediate resistance at 13170-180 range and then 13250 levels.

Economic Data Calendar for Sep 19^th2024

The report is being prepared by Bitupan Majumdar, an independent SEBI registered research analyst with registration code INH30006962. Please consult your financial advisor before taking investment decision.

Also Read: Fed Meeting Starting Today, Results Due Tomorrow Overnight