The Indian stock market showed a mixed response on Thursday afternoon following the US Federal Reserve’s decision to cut interest rates by 50 basis points, marking the beginning of a new rate-cut cycle.
As of 1 p.m., the Sensex was trading at 83,211.06, up 262.83 points or 0.32 per cent. The Nifty 50 The index stood at 25,429.70, gaining 52.15 points or 0.21 per cent. However, broader market indices faced selling pressure, with the Nifty Next 50 down 1.45 per cent and the Nifty Midcap Select falling 1.28 per cent.
Shrey Jain, Founder and CEO of SAS Online, commented on the market outlook: “The long-awaited Fed pivot has finally materialized… The Nifty 50 index is likely to trade sideways for now. Fresh long positions in the Nifty 50 can be considered only if the index surpasses today’s high of 25,611, with a target set at 25,850.”
Jain added, “We anticipate the Bank Nifty to continue its outperformance relative to the Nifty, aiming for the 53,000 level, with 52,000 expected to act as a key support level.” The Nifty Bank index was up 0.44 per cent at 52,980.10.
The market breadth remained negative, with 2,877 stocks declining against 991 advances on the BSE. 223 stocks hit the upper circuit, while 323 touched the lower circuit. 222 stocks reached 52-week highs, compared to 47 hitting 52-week lows.
Top gainers on the NSE included NTPC (3.19 per cent), Nestle India (1.90 per cent), Bharti Airtel (1.64 per cent), Maruti (1.23 per cent), and HDFC Bank (1.22 per cent). On the flip side, major losers were BPCL (-2.89 per cent), Adani Ports (-1.94 per cent), Shriram Finance (-1.82 per cent), ONGC (-1.77 per cent), and Coal India (-1.43 per cent ).
Top losers of Nifty IT stocks included Mphasis (-1.43 per cent), HCL Tech (-1.14 per cent), TCS (-1.01 per cent)
Pranay Aggarwal, CEO of Stoxkart, a deep discount stock broker, noted, “The large rate cut by the Fed raised some concerns over a slowing economy. But Fed Chair Jerome Powell soothed some of these concerns, stating that he did not see a heightened risk of an economic downturn.”
Jain also provided insights on potential market movements: “We expect only 50 BPS cut in repo rate in India by March 2025. We are positive on short- and medium-term bonds. Rate cut augurs well for flows into risky assets including Indian equities.”
He advised caution, saying, “Market participants are expected to take some profits. Profits should be booked in IT stocks… Stock specific trades on the long side can be considered in select names in FMCG and sugar sector. Metal stocks should be on the traders’ radar, as rate cuts may rejuvenate them.”
Both analysts emphasized the likelihood of market volatility in the coming days. Jain cautioned, “As we approach the weekend, we should prepare for bouts of volatility in the stock market. It is crucial to adhere to stop-loss levels in your trading strategies.”
Investors and traders are advised to closely monitor market movements and adhere to their risk management strategies as they navigate the evolving economic landscape.