Page 18 - Us Fed News Today

Nifty and Sensex hit record highs in trade today after the US Fed signaled that its interest rate-hiking policy is at an end and it will cut rates in 2024. Amid the rally, brokerages have come out with a bearish view (sell/reduce calls) on three stocks.

The Nifty Bank snapped a two-day losing streak to close with gains of over 1% supported by gains in top private sector banks. The index rose 640 points to close at 47,732 while the Nifty50 closed at 21,182, up 256 points on Thursday.

A stellar rally in domestic equities fuelled by foreign fund inflows also boosted the rupee sentiment.

US Fed officials expect to lower rates by 75 basis points next year, a sharper pace of cuts than indicated in Septembers projections. The Fed cutting rates draws positive reaction from India due to an overall positive impact.

IT companies were the top gainers, led by Infosys, Tech Mahindra and LTI Mindtree, all of which ended the session with gains of over 3.5% each

Inflation concerns in the US re-emerged after data showed the Consumer Price Index (CPI) unexpectedly inched higher in November month-on-month, but edged lower on an annual basis. The data bolstered expectations that the Fed will not pivot to rate cuts early next year.

To take advantage of the current high interest rates, you may allocate some additional money to fixed-income products like fixed deposits, bonds, debt mutual funds, Small Savings Schemes, etc.

As the market awaits Fed decision, expected later in the day, the market sentiment suggesting an expectation of stability in rates

The Federal Open Market Committee is poised to keep rates in a range of 5.25% to 5.5% at its two-day policy meeting ending Wednesday, a 22-year high first reached in July. The rate decision and an accompanying statement will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.

“The main reason why the Fed will be lowering interest rates next year is because if they do not and inflation comes down, that will be making the federal funds rate, in real terms, inflation adjusted even higher. I do not think they are going to want to do that.”