Global markets: SGX Nifty to FOMC meeting — key triggers for Dalal Street today
3 min read 21 Mar 2023, 07:31 AM ISTSGX Nifty today opened higher but witnessed profit booking at crucial resistance levels, say experts
PremiumGlobal market update: On account of relief rally fuelled by Swiss government approved takeover of Credit Suisse Group AG, key Wall Street indices finished higher on Monday. However, ahead of two-day US Fed's FOMC meeting beginning today, US dollar rate continue to remain a sell on rise asset among investors and Dollar Index sustained below 103 levels.
Here we list out key global market triggers that may dictate stock market today:
US stock market
After Swiss government approved takeover of Credit Suisse Group AG, Wall Street witnessed relief rally on Monday. Among key benchmark indices of the US stock market, Dow Jones finished 1.20 per cent higher, S&P 500 index gained 0.89 per cent whereas tech heavy weight Nasdaq advanced 0.39 per cent.
"US stocks edged higher as regulators worldwide rushed to shore up market confidence, with the recent financial turmoil spurring speculation on a slower pace of tightening from major central banks. Global central banks witnessed no dash for dollars after uniting with the Federal Reserve to ease access to supplies of the US currency — an indication that the latest bout of banking turbulence may not be causing undue stress to the financial system," said Marc Despallieres, Chief Strategy and Trading Officer at Vantage.
FOMC meeting in focus
Two days US Fed's FOMC meeting is beginning today and its outcome will be announced on tomorrow i.e. on Wednesday. Market is buzz with hawkish stance from the US Fed officials in this meeting and expecting a maximum of 25 bps rate hike.
"US Fed rate hike below 50 bps would mean less hawkish stance of the US Fed officials and it would be negative for the US dollar but good for equities and other assets," said Anuj Gupta, Vice President — Research at IIFL Securities.
SGX Nifty today
In early morning session, SGX Nifty opened higher at 17,081 and went on to hit intraday high of 17,112 mark. However, profit booking triggered at higher levels and the index went on to hit intraday low of 16,840 levels.
"SGX Nifty is signaling range-bound session on Tuesday as short covering is expecting at crucial support levels and selling at major resistance levels," said Anuj Gupta of IIFL Securities.
Asian market today
In early morning deals on Tuesday, the Japanese Nikkei crashed 1.42 per cent, Shanghai index is down 0.39 per cent, Hong Kong's Hang Seng tumbled 0.74 per cent. But, South Korean KOSPI was up 0.54 per cent.
US dollar to INR
Ahead of US Fed's FOMC meeting beginning today, US dollar rate continues to remain under pressure as market is expecting less hawkish stance from the US Fed officials in this FOMC meeting. In fact, Nomura has predicted 25 bps rate hike in this FOMC meeting scheduled from 21st to 22nd March 2022.
On outlook for INR vs USD, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas said, "We expect Rupee to trade with a negative bias on deteriorating global risk sentiments. The banking crisis in US and Europe may continue to put downside pressure on riskier assets. Markets may also now focus on US FOMC meeting on Tuesday and Wednesday and UK’s inflation data and Bank of England’s monetary policy later this week. FOMC is expected to hike rates by 25-bps. USDINR spot price is expected to trade in a range of ₹82 to ₹83."
Crude oil price
Oil prices continue to remain under the bears' control. In early morning session on Tuesday, crude oil price in international spot market lost 0.62 per cent and hit $67.32 per barrel levels.
US bond yield
In early morning session, US 10-year bond yield advanced 0.55 per cent to 3.496 levels whereas US 30-year bond yield surged 0.33 per cent to 3.674.
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