Stock Market Updates: Wednesday, September 18, 2024
Positive Outlook for Indian Markets Ahead of Fed Decision
On the morning of September 18, 2024, Indian stock market indices BSE Sensex and Nifty50 are poised for a slightly optimistic opening. This sentiment is reflected in GIFT Nifty futures, which indicate a potential rise as investors await the US Federal Reserve’s policy announcement later today.
As of 7:40 AM, GIFT Nifty futures stood at 25,471 points—approximately 20 points higher than the previous close of Nifty futures.
Market Performance on Tuesday
In yesterday’s trading session within domestic markets, both benchmark indices experienced gains. The BSE Sensex increased by 90.88 points (0.11%) to reach a closing value of 83,079.66. Similarly, the NSE Nifty50 saw an uptick of 34.80 points (0.14%), finishing at 25,418.55.
Trade Deficit and Economic Indicators
India’s trade deficit has expanded to its highest level in ten months at $29.7 billion for August due to record imports totaling $64.4 billion—largely driven by a surge in gold imports that doubled compared to previous months. Exports have also faced challenges; they fell for the second consecutive month to $34.7 billion amid declining oil prices and subdued global demand.
Moreover, inflation based on the wholesale price index (WPI) has decreased to a four-month low of 1.31% year-on-year in August from July’s figure of 2.04%, according to data released by the Ministry of Commerce and Industry.
Mixed Trends Across Asia-Pacific Markets
Asian markets opened with mixed results on Wednesday following Wall Street’s performance where both S&P 500 and Dow Jones Industrial Average reached new highs recently.
Australia’s S&P/ASX index dipped slightly while Japan’s Nikkei surged by approximately 0.74%. The broader Topix index also rose by about half a percent (0.48%). In contrast, mainland China’s CSI300 remained nearly unchanged while Taiwan’s Weighted Index fell by around 0.35%. Notably, South Korean and Hong Kong markets are closed today; however, trading will resume in mainland China after their three-day holiday break.
US Market Overview Before Fed Meeting
The US stock market concluded Tuesday with minimal fluctuations after achieving record highs earlier that day; meanwhile, the dollar maintained its strength as robust economic indicators eased concerns regarding an impending slowdown ahead of anticipated interest rate cuts from the Federal Reserve—the first reduction in over four years.
Recent signs indicating a cooling job market during summer months combined with media speculation have led traders to predict that during today’s meeting the Federal Reserve may opt for more aggressive measures than usual—potentially reducing rates by half a percentage point—to mitigate any economic weaknesses emerging within the US economy.
Data released on Tuesday revealed an increase in retail sales during August alongside improved factory production figures; such positive trends could complicate arguments favoring significant rate cuts moving forward.
Currently across financial markets there is still considerable speculation regarding interest rates—with traders estimating about a 63% chance that rates will be cut by 50 basis points, contrasted with 37% likelihood predicting only 25 basis points, according to CME Group’s FedWatch tool analysis.
During yesterday’s session on Wall Street:
- The S&P500 reached an all-time intraday high but ultimately closed just marginally higher at 5,634.58, up only 0.03%
- The Dow Jones Industrial Average slipped slightly downwards (-0 .04%) ending at 41 ,606 .18
- Conversely , tech-heavy Nasdaq Composite defied this trend rising up (+0 .20 %) closing at 17 ,628 .06
- MSCI All – World Index edged up modestly (+0 .04 %) reaching 828 .72
The dollar showed resilience against most major currencies throughout trading hours following recent lows it had experienced previously .
Global Monetary Policy Developments This Week
In addition to developments within U.S monetary policy discussions this week , both Bank Of England (BoE) & Bank Of Japan(BOJ) are scheduled meetings where they’re expected not make any changes unlike their American counterpart .
The yield on two-year U.S Treasury bonds—which typically reflects short-term rate expectations—increased slightly rising 4.4 basis points reaching 3.5986 percent after having dropped previously down towards 3.528 percent marking two-year lows last session .
Meanwhile , benchmark ten-year yields climbed 2.3 basis point hitting 3.644 percent compared against Monday ’s close which was recorded as3 .621 percent .
Oil prices witnessed upward movement amidst ongoing assessments concerning Hurricane Francine ’s impact upon output levels across Gulf Coast regions within United States territory ; additionally India announced elimination windfall taxes imposed upon domestically produced crude oil effective September eighteen onwards .
U.S crude oil settled higher gaining approximately1 .57 % concluding day priced around$71 .19 per barrel, whereas Brent crude finished similarly elevated (+1 .31 %) settling near$73 .70 per barrel mark respectively .
Spot gold prices dipped marginally (down -0 .51 %) landing around$2,569.51 per ounce, having recently achieved record highs earlier this week.
