Fed sees rates staying high for some time with cuts eyed in 2024 : Daily Market Update Equity 04 Jan 2024 | Globe Capital Market LTD.
Fed sees rates staying high for some time with cuts eyed in 2024 : Daily Market Update Equity 04 Jan 2024

Federal Reserve policymakers agreed last month that it would be appropriate to maintain a restrictive stance “for some time,” while acknowledging they were probably at the peak rate and would begin cutting in 2024. “Participants viewed the policy rate as likely at or near its peak for this tightening cycle,” according to the minutes of the Dec. 12-13 Federal Open Market Committee meeting released Wednesday. That said, officials “reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably.”

Overview and Outlook

Global Stock Market Today

  • US equity markets were down in range by 0.76% to 1.06%
  • European equity markets also settled in red, down 0.51% to 1.61%.
  • Most of the Asian equity markets are trading in red.
  • GIFT Nifty is trading up by 50 points, Nifty futures are likely to open around 21630 levels (as on 8:30AM)


News highlights from across the globe

  • U.S. Federal Reserve’s December meeting minutes suggested interest rates are going to stay elevated for a long time.
  • Brent crude was trading 2.36% higher at $78.25 a barrel. Gold was lower by 0.03% at $2,042.11 an ounce.


Important news updates from the domestic front

  • Adani Ports and Special Economic Zone approved raising Rs 5,000 crore via non-convertible debentures. The company also approved the redesignation of Gautam Adani as executive chairman, the re-designation of Karan Adani as managing director, and the appointment of Ashwani Gupta as CEO, effective from Jan. 4.
  • Religare Enterprises: The Burman family has called for a probe into the allotment of shares of Religare Finvest to Rashmi Saluja through employee stock ownership plans.
  • Power Finance Corp signed a MoU with the Gujarat Government for projects worth Rs 25,000 crore.
  • Vedanta recorded aluminium output at 599 KT, up 6% YoY, refined zinc output at 203 KT, down 4% YoY, and oil & gas average gross operated output at 1,23,413 boe/day, down 15% YoY. It also raised Rs 3,400 crores via the private placement of NCDs.
  • Telecom Companies: Bharti Airtel’s net subscriber additions dropped in October to 3.52 lakh. Reliance Jio added 31.59 lakh wireless subscribers, while Vodafone Idea lost 20.44 lakh wireless subscribers.
  • IndusInd Bank recorded deposits at Rs 3.68 lakh crore as of Dec. 31, up 13% YoY, and net advances at Rs 3.26 lakh crore, up 20% YoY. The bank’s CASA ratio stood at 38.5% vs. 42% YoY.
  • Steel Authority of India: The government decided to scrap the privatisation of the company’s Salem Steel Plant in Tamil Nadu.
  • Grasim Industries’s Canada joint venture stops pulp production, citing market conditions.
  • BGR Energy Systems: SBI has classified its Rs 2,060-crore credit exposure to the company as sub-standard.
  • Torrent Power: The company signed four Memorandums of Understanding worth Rs 47,350 crore with the Gujarat government.
  • NHPC signed a MoU with Gujarat Power Corp. for investing Rs 4,000 crore in the 750 MW Kuppa Pumped Storage Project.


Nifty Overview & Outlook

Benchmark Nifty index settled on negative note, closed shop at 21517 levels after a cut of nearly 150 points from its previous closing values.

Broader markets outperformed the benchmark index as Small cap and Midcap indices ended on a flat to positive note against 0.6% decline of the frontline index.

Majority of sectoral indices tracked at NSE settled in green. Amongst them, Nifty PSU Bank and Realty index was at the top of the tally, gained over 1% followed by Healthcare, Pharma and Oil & Gas indices that rose over 0.5% each. On the other hand, Nifty IT and Metal index ended lower, down 2.5% and 1.80% respectively.

Technically, Nifty index is going through a profit taking phase as predicted in the previous posts. Cross and sustenance below 21500 levels might take it towards 21300 and lower levels in immediate near term.


Derivatives Overview & Outlook

Yesterday, no significant activity was seen in Nifty futures on price as well as on open interest front, whereas long unwinding was seen in Finnifty futures with decrease in open interest by 4.3%. In Banknifty on price front there was no change but open interest decreased by 10.7%.

On the sectoral front, long buildup was seen among Infrastructure, Capital goods, Telecom and Pharma shares, whereas short buildup was seen in Metals, Automobile and Technology stocks. Short covering was seen in Media stocks.

On options front, call writing was seen at multiple strikes and maximum positions are at 21500 PE and 22000 CE and closely followed by 21700 CE.


Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 666 Cr in the cash segment, sold stocks futures and index futures worth Rs. 2833 Cr and Rs 619 Cr respectively. DIIs were net seller in the cash segment to the tune of Rs 863 Cr.


Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 21760-21870; Supports 21480-21330

Banknifty – Resistances 48400-48700; Supports 47400-47050

Finnifty – Resistances 21560-21690; Supports 21250-21030




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