ALL EYES ON THE FED

 

ALL EYES ON THE FED

 

WORLD MARKETS

 

On Monday, U.S. equity benchmark indices ended flat.

 

Yesterday, U.S. indices ended lower by 0.2%-0.3% ahead of latest interest rate decision and economic update from the Federal Reserve due Wednesday.

 

Fed is expected to leave interest rate unchanged but markets will watch for commentary around the path of inflation and future of monetary policy.

 

U.S. 10-year treasury yield rose 6 bps to 4.361%. Dollar index inched up 0.1% to 105.21. Gold fell 0.1% to $1931 per ounce.

 

Oil prices eased after hitting 10-month highs. Brent crude futures settled 9 cents lower at $94.34 a barrel and WTI futures dropped 28 cents to $91.20.

 

In Europe, FTSE and CAC inched up 0.1% each but DAX was down 0.4%. Final euro zone inflation figures for August were revised down slightly to 5.2% y-o-y from 5.3%, with monthly inflation at 0.5%. The annual reading in July was 5.3%.

 

AT HOME

 

Sensex and Nifty fell 0.4% and 0.3% respectively, with Sensex snapping an 11-day winning streak. Sensex settled at 67596, down 241 points while Nifty lost 59 points to settle at 20133. Nifty mid-cap and small-cap indices fell 0.4% and 0.5% respectively, snapping a 3-day winning streak. Nifty PSU Bank index surged 3.4%, becoming top gainer among the sectoral indices, followed by 0.8% higher Auto index. Realty and Media indices were the top losers, down 1.4% and 1.3% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 1237 cr, 333 cr and 535 cr respectively. DIIs were net buyers to the tune of Rs 553 cr.

 

Rupee depreciated 8 paise to end at 83.27/$.

 

OUTLOOK

 

Today morning, Nikkei is flat while Hang Seng and Shanghai are down 0.4% and 0.2% respectively. GIFT Nifty is suggesting around 100 points lower start for our market.

 

In Monday's report we had said that 20300, around which, a rising trendline adjoining tops made in December 2022 and July 2023 is placed, was the next upside level to eye and had advised trailing stop-loss in longs to 19950.

 

Nifty, after touching a high of 20195, slipped to end at 20133. The benchmark is set to open near 20050 today.

 

20000 is the immediate support on the hourly chart, a sustained trading below which will confirm a "Sell" on the hourly chart and will pave the way for further correction; 20222, the top made last week, which roughly coincided with a trendline adjoining tops made in December 2022 and July 2023, is the immediate hurdle.

 

For Banknifty, 45700-45650 continues to be immediate support zone, upon breach of which, 45000 would be next support to eye; 47000, around which a rising trendline adjoining tops made in December 2022 and July 2023 is placed, continues to be upside level to eye.

Investment in securities market is subject to market risk.

Please check https://www.prudentbroking.com/Disclaimert.aspx for detailed disclaimer.