Fed prepares to shift to rate cuts in 2024 as inflation eases - Daily Market Update - Equity 14 Dec 2023 | Globe Capital Market LTD.
Fed prepares to shift to rate cuts in 2024 as inflation eases – Daily Market Update – Equity 14 Dec 2023

The Federal Reserve pivoted towards reversing the steepest interest-rate hikes in a generation after containing an inflation surge so far without a recession or a significant cost to employment. While Chair Jerome Powell said Wednesday policymakers are prepared to resume rate increases should price pressures return, he and his colleagues issued forecasts showing that a series of cuts would be likely next year. Powell said the topic came up at their meeting, where the Fed decided to keep rates at a 22-year high for a third straight time.

Overview and Outlook

Global Stock Market Today

  • US equity markets settled higher in range 1.21% to 1.4%.
  • Barring FTSE, other European equity markets settled on a flat to negative note
  • Majority of Asian equity markets trading in green
  • GIFT Nifty is up by 200 points, Nifty futures are likely to open around 21200 levels (as on 8:30AM)


News highlights from across the globe

  • Stocks and bonds across the world rallied on signs of a Federal Reserve rate cut next year, reigniting a bullish pulse across markets as inflation eases.
  • Dow Jones Industrial Average index closed at its highest level, S&P 500, and Nasdaq gained over 1% after the Federal Reserve’s dot plot signaled that officials anticipate cutting rates 75 basis points in 2024 — a sharper pace of cuts than indicated in September.
  • Brent crude was trading 0.63% higher at $74.73 a barrel.


Important news updates from the domestic front

  • State Bank of India will be signing a 70 million Euro line of credit with KfW (German Development Bank) for supporting solar PV projects in India.
  • NBCC received an order worth Rs 1,500 crore from the National Cooperative Development Corporation for the construction of 1,469 warehouses and other agri-infrastructure across India.
  • RBL Bank acquired an 8.51% stake in ONDC for Rs 40 crore.
  • HDFC Bank: HDFC Life received an exchange’s nod for reclassifying Abrdn Mauritius Holdings to the ‘Public’ category from ‘Promoter’.
  • Reliance Industries: Moody’s Investors Service affirmed the company’s ‘Baa2’ domestic long-term issuer rating and foreign currency senior unsecured rating.
  • Biocon unit Bicara completed $165 million in Series C funding. Post-funding, the company’s shareholding in Bicara on a fully diluted basis will fall below 20% and thereby, Bicara will cease to be an associate company of Biocon Ltd.
  • Vedanta will consider and approve the second interim dividend on equity shares on Dec. 18.


Nifty Overview & Outlook

The benchmark Nifty index ended on a flat note at 20906 levels after a highly volatile trading session.

The broader markets outperformed the benchmark as Mid cap & Small cap index rose 1.13% and 0.87% respectively against the flat closing of the frontline index.

Majority of the sectoral indices settled higher. Amongst them, Nifty Realty index was at the top of the tally, gained over 1.5% followed by Nifty Auto, Healthcare and Pharma index that were up over 1% each.

Nifty index manage to close above 20900 levels. Going ahead, we reiterate our sideways view on Nifty index till it is trading in 20800-21050 congestion range. Either side break from this range on a closing basis will start the next directional move in that direction.


Derivatives Overview & Outlook

Yesterday, no significant changes was seen in Nifty and Banknifty futures on price front whereas open interest decreased by 2.9% and 3.9% respectively. Finnifty futures too remained almost unchanged on price front whereas on open interest front it added around 2.7% of open interest.

On the sectoral front, long buildup was seen among Chemical, Infrastructure and Banking stocks whereas some short covering was seen in Media stocks.

On options front, put writing was seen at multiple strikes and maximum positions are at 21000 CE and 20500 PE.


Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 4711 Cr in the cash segment, sold stocks futures and index futures worth Rs 2460 Cr and Rs 861 Cr respectively. DIIs were net seller in the cash segment to the tune of Rs 958 Cr.


Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 21170-21280; Supports 20850-20680

Banknifty – Resistances 48120-47800; Supports 46740-46320

Finnifty – Resistances 21460-21590; Supports 21090-20970




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