Market Commentary - Quick Review
The domestic equity indices ended a volatile session with decent gains on Thursday after hitting fresh record highs, following the US Fed's guidance for more rate cuts after reducing the key rate by a half-percentage point. Trading was also volatile due to weekly F&O series expiry today. The Nifty settled above the 25,400 level. Private bank, FMCG and private bank shares advanced while media, oil & gas and PSU bank shares declined.
As per provisional closing, the S&P BSE Sensex added 236.57 points or 0.29% to 83,184.80. The Nifty 50 index rose 38.25 points or 0.15% to 25,415.80.
The Sensex and Nifty clocked an all-time high of 83,773.61 and 25,611.95 respectively in morning trade.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 0.53% and the S&P BSE Small-Cap index declined 1.06%.
The market breadth was weak. On the BSE, 1,235 shares rose and 2,721 shares fell. A total of 111 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tumbled 6.74% to 12.47.
Fed Cuts Rates for the First Time in Years, Signaling Policy Shift:
The US Federal Reserve made a significant policy shift on Wednesday, reducing interest rates by 50 basis points. This marks the first rate cut in over four years, signaling a potential easing of the restrictive monetary policy implemented to combat inflation. The Federal Open Market Committee (FOMC) justified the decision, citing progress in curbing inflation and a shifting balance of risks. The rate cut is expected to lower borrowing costs for consumers and businesses, stimulating spending and investment.
While the 50-basis point cut was at the higher end of market expectations, analysts anticipate further rate reductions in the coming months. The Fed hinted at two more 25-basis point cuts this year, but market sentiment suggests more aggressive easing could be on the horizon. Despite the optimism surrounding rate cuts, Federal Reserve Chair Jerome Powell tempered expectations. He emphasized that the central bank does not intend to return to the era of ultra-low interest rates seen during the COVID-19 pandemic. Powell indicated that the Fed's neutral rate is likely to be higher than in the past, suggesting a less accommodative monetary policy stance going forward.
The Fed's rate cut will have global repercussions, particularly in emerging markets like India. Lower interest rates in the US can influence capital flows and exchange rates, affecting these economies' financial conditions.
IPO Update :
The initial public offer (IPO) of Western Carriers (India) received bids for 54,39,72,024 shares as against 2,08,68,467 shares on offer, according to stock exchange data at 15:15 IST on Thursday (19 September 2024). The issue was subscribed 26.07 times.
The issue opened for bidding on Friday (13 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 163 to Rs 172 per share. An investor can bid for a minimum of 87 equity shares and in multiples thereof.
The initial public offer (IPO) of Northern Arc Capital received bids for 1,55,19,25,206 shares as against 2,14,78,290 shares on offer, according to stock exchange data at 15:15 IST on Thursday (19 September 2024). The issue was subscribed 72.26 times.
The issue opened for bidding on Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 249 to 263 per share. An investor can bid for a minimum of 57 equity shares and in multiples thereof.
The initial public offer (IPO) of Arkade Developers received bids for 1,63,23,68,760 shares as against 2,37,75,719 shares on offer, according to stock exchange data at 15:15 IST on Thursday (19 September 2024). The issue was subscribed 68.66 times.
The issue opened for bidding Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 121 to 128 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.
Buzzing Index:
The Nifty Private Bank index rose 0.56% to 26,650.70. The index advanced 3.95% in six consecutive trading sessions.
IDFC First Bank (up 1.84%), Kotak Mahindra Bank (up 1.83%), HDFC Bank (up 0.78%), ICICI Bank (up 0.35%) and Axis Bank (up 0.26%), Federal Bank (up 0.25%), IndusInd Bank (up 0.22%) edged higher.
On the other hand, RBL Bank (down 0.9%), Bandhan Bank (down 0.6%) and City Union Bank (down 0.32%) edged lower.
Stocks in Spotlight:
Garden Reach Shipbuilders & Engineers (GRSE) shed 0.71%. The firm has signed a contract with Carsten Rehder Schiffsmakler and Reederei GmbH & Co., KG Germany for construction and delivery of additional 4 multi-purpose vessels. The value of the additional order is approximately $54 million.
Indian Renewable Energy Development Agency (IREDA) rose 1.24% after the PSU company informed that it has received approval of the Department of Investment and Public Asset Management (DIPAM) to dilute up to 7% government holding via qualified institutions placement (QIP) for Rs 4,500 crore.
Macrotech Developers added 1.06% after the company said that it has executed securities purchase agreements with Ivanhoe Warehousing India Inc. for acquisition of their interest in the digital infrastructure platform entities in Maharashtra for Rs 239.56 crore. It will acquire 10% equity stake and other securities of Bellissimo Digital held by Ivanhoe for Rs 14.77 crore. Post the acquisition, the company's equity stake in Bellissimo Digital will increase from 60% to 70%.
DCX Systems gained 1.70% after the company announced that the company received export orders from Elta Systems, Israel for supply electronic modules. The total cost of order is $18,495,779.10, equivalent to Rs 154.80 crore.
360 ONE WAM declined 1.25%. The firm said that its board has approved raising of funds by issue of equity shares, for an aggregate amount not exceeding Rs 2,250 crore, through Qualified Institutions Placement (QIP) route.
Tilaknagar Industries advanced 2.77% after the company's board has approved an investment of Rs 8.03 crore in Round the Cocktails Private (Bartisans) through a mix of primary investment and secondary acquisition. The company will hold 36.17% stake in Bartisans on a fully diluted basis, following a combination of primary funding and secondary share acquisition.
Power Mech Projects shed 0.36%. The company received an order for operation and maintenance (O&M) of thermal power plant of Talwandi Sabo Power (a subsidiary of Vedanta) worth Rs 865 crore.
CESC fell 1.21%. The company said that its subsidiary Purvah Green Power has entered into a binding term sheet with Ecoren Energy India for setting up wind power project of up to 686.85 MW.
Ion Exchange (India) advanced 2.61% after the company announced that it has been awarded contracts worth Rs 161.19 crore from Adani Power for comprehensive & complete total water & environment management solution.
Global Markets:
Dow Jones Futures were up 469 points, indicating a strong opening in the US stock market today.
European and Asian stocks advanced on Thursday as investors digested the U.S. Federal Reserve's first interest rate cut in four years.
Japanese shares climbed as the yen weakened ahead of the Bank of Japan's policy meeting on Friday. The Bank of England is also scheduled to announce its monetary policy decision later in the week.
While the Fed's rate cut provided a boost to regional markets, gains were tempered by the weak overnight performance on Wall Street. The outsized cut raised concerns about potential economic slowdown, leading to some cautious trading.
In China, investors await the central bank's decision on the benchmark loan prime rate on Friday. Analysts generally expect no changes, given Beijing's conservative approach to stimulus measures.
US stock market closed with modest losses and the dollar strengthened on Wednesday following the Fed's rate cut. The S&P 500 declined by 0.29%, falling slightly below its all-time high. The Dow Jones Industrial Average and Nasdaq Composite also experienced minor losses. Trading in Tupperware Brands remained suspended after the company filed for Chapter 11 bankruptcy protection, sending its stock plummeting.
US retail sales, unadjusted for inflation, increased 0.1% in August after an upwardly revised 1.1% gain, pointing to healthy consumer demand that continues to underpin the economy. Excluding autos and gasoline stations, sales advanced for a fourth month.
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