5 things that changed for market overnight: Gift Nifty, US Fed policy to global market cues for Sensex today | Mint
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Business News/ Markets / Stock Markets/  5 things that changed for market overnight: Gift Nifty, US Fed policy to global market cues for Sensex today
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5 things that changed for market overnight: Gift Nifty, US Fed policy to global market cues for Sensex today

The Asian markets traded lower, while the US markets ended in the red after the US Federal Reserve Chair Jerome Powell announced a hawkish monetary policy. The US Fed kept the benchmark interest rates unchanged at 5.25% to 5.5%, but said it will raise interest rates one more time this year.

Japan’s Nikkei 225 dropped 0.44% as the Bank of Japan begins its two-day monetary policy meeting. (Image: AP)Premium
Japan’s Nikkei 225 dropped 0.44% as the Bank of Japan begins its two-day monetary policy meeting. (Image: AP)

The Indian stock market indices Sensex and Nifty50 are expected to open lower on Thursday tracking weakness in global peers.

The Asian markets traded lower, while the US markets ended in the red after the US Federal Reserve Chair Jerome Powell announced a hawkish monetary policy.

The US Fed kept the benchmark interest rates unchanged at a 22-year high of 5.25% to 5.5%, but said it will raise interest rates one more time this year.

“We expect the market to remain cautious in the near term amid major events, while profit booking in the broader market is likely to continue. Apart from the US Fed rate outcome, two other large central banks i.e. BOE & BOJ are scheduled to announce their policy decision on Thursday," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded lower on Thursday following overnight fall in US stocks after the US Fed’s interest rate decision. 

Australia’s S&P/ASX 200 declined 0.21%.

Japan’s Nikkei 225 dropped 0.44% as the Bank of Japan begins its two-day monetary policy meeting. The Topix fell 0.21%. South Korea’s Kospi fell 0.5% and the Kosdaq lost 0.37%.

Hong Kong’s Hang Seng index futures traded higher at 17,958, compared to the HSI’s close of 17,885.60.

Meanwhile, Gift Nifty was trading at around 19,857 as against Nifty futures’ previous close of 19,972, indicating a negative start for the Indian benchmark equity indices.

Wall Street

The US stock market indices ended lower on Wednesday after the Federal Reserve kept key interest rates unchanged, but said it could hike rates again this year.

The Dow Jones Industrial Average fell 76.85 points, or 0.22%, to 34,440.88, while the S&P 500 declined 41.75 points, or 0.94%, to 4,402.2. The Nasdaq Composite ended 209.06 points, or 1.53%, lower at 13,469.13.

Among stocks, Klaviyo shares rallied 9.2% in its debut on the New York Stock Exchange.

Maplebear plunged 10.7%, while Arm Holdings shares declined 4.1%.

Pinterest share price gained 3.1% after the company announced a share buyback of up to $1 billion. Coty shares rose 4.4% after the CoverGirl parent hiked its annual core sales forecast.

US Fed delivers ‘hawkish pause’

The US Federal Reserve on Wednesday kept the benchmark interest rates unchanged, in line with the street estimates, but stiffened its hawkish stance. The Fed Chair Jerome Powell in his monetary policy statement announced that the Federal Open Market Committee (FOMC) unanimously voted to leave the Fed funds rate at a 22-year high of 5.25% to 5.5% after the two-day meeting held on September 19 and 20.

However, Powell also said the Fed is “prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective."

Read here: US Fed Meeting: FOMC keeps interest rates unchanged; here are key takeaways from Federal Reserve monetary policy

US two-year Treasury yield at 17-year high

The yield on two-year US Treasury notes rose to a 17-year high of 5.1970% on Thursday, a day after the Federal Reserve held interest rates steady but stiffened its hawkish stance for future policy, Reuters reported.

The 10-year yield rose to 4.4310%, a new 16-year peak. 

The US central bank projected a further rate increase by the end of the year and expected monetary policy to be significantly tighter through 2024 than previously thought.

US Dollar index jumps 

The US dollar index, which measures the currency against a basket of rivals, rose as high as 105.59 on Thursday, its strongest since March 9. The index climbed for its ninth straight week last week, its longest winning streak in nearly a decade as resilient US growth fueled a rebound in the dollar.

The Japanese yen was feeling the heat after the Fed meeting, hovering around 148.39 per dollar and just off a fresh low of 148.47, its weakest since November, Reuters reported.

The euro was last down over 0.2% at $1.0632. Sterling was last trading at $1.2311, down over 0.2% and at a fresh multi-month low against the greenback.

(With inputs from Reuters)

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Published: 21 Sep 2023, 07:24 AM IST
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