Indian stock market: 8 key things that changed for market overnight – Gift Nifty, US Fed rate cut to Wall Street crash

Indian stock market: The domestic equity benchmark indices, Sensex and Nifty 50, are expected to open lower on Thursday echoing a slump in global markets after the US Federal Reserve trimmed expectations for interest rate cuts next year.

Asian markets slid, while the US stock market crashed, with all three major indexes posting their biggest daily decline in months.

The US Federal Reserve cut interest rates by 25 basis points to the 4.25% – 4.50% range and indicated a slower pace of rate cuts next year given the solid labor market and the recent stall in lowering inflation.

On Wednesday, the Indian stock market benchmark indices ended over half a percent lower amid heavy selling in financials, auto and metals stocks.

The Sensex plunged 502.25 points, or 0.62%, to close at 80,182.20, while the Nifty 50 settled 137.15 points, or 0.56%, lower at 24,198.85.

“Investors shunned stocks led by banking ahead of the outcome of the US rate decision with focus on the Fed chairman’s commentary on inflation & growth outlook in the backdrop of worsening global economic situation. Domestic rupee continuing its downward trajectory and hitting fresh lows also dampened the sentiment, as extended fall could further worsen trade deficit and hit inflation going ahead,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded lower on Thursday following sharp decline on Wall Street overnight.

Japan’s Nikkei 225 fell 1.4% and Topix dropped 1.27%, while Japanese bond yields jumped ahead of the Bank of Japan’s monetary policy. South Korea’s Kospi index declined 1.84% and the Kosdaq index plunged 1.92%. Hong Kong’s Hang Seng index futures indicated a mildly higher opening.

Gift Nifty Today

Gift Nifty was trading around 23,935.00 level, a discount of nearly 320 points from the Nifty futures’ previous close, indicating a gap-down start for the Indian stock market indices.

Wall Street

US stock market ended sharply lower on Wednesday after the Fed cut rates but disappointed with projections that signaled a more cautious path of easing next year.

The Dow Jones Industrial Average plunged 1,123.03 points, or 2.58%, to 42,326.87, while the S&P 500 dropped 178.45 points, or 2.95%, to 5,872.16. The Nasdaq Composite ended 716.37 points, or 3.56%, lower at 19,392.69.

The Dow and S&P saw their biggest one-day percentage decline since August 5 and the Nasdaq saw its biggest daily decline since July 24, Reuters reported.

Tesla stock price cracked 8.2%, Amazon shares declined 4.6%, Microsoft stock price fell 3.76%, and Nvidia share price dropped 1.14%. Microstrategy tumbled 9.5%, MARA Holdings plunged 12.2% and Riot Platforms fell 14.5%.

US Fed Rate Cut

The US Federal Reserve slashed the benchmark interest rate by 25 basis points (bps) to 4.25% – 4.50%, broadly in line with Wall Street estimates. The US Fed chair Jerome Powell-led rate-setting panel Federal Open Market Committee (FOMC) now envisions only two rate cuts in 2025 after latest US inflation prints revealed that consumer prices still remain ‘somewhat elevated’ in the world’s largest economy.

Treasury Yields

US Treasury yields surged after the Fed flagged a slower pace of easing next year. The yield on the benchmark US 10-year note touched its highest level since May 31 at 4.518%. The two-year yield, which more closely tracks expectations for Fed action, climbed to 4.35% from 4.25%.

US Housing Starts

US new-home construction unexpectedly fell in November. Housing starts decreased 1.8% to an annualized rate of 1.29 million, the slowest since July. The median forecast was for a 1.35 million pace. Starts of single-family homes rose 6.4% to an annualized rate of 1.01 million while new construction of multifamily projects decreased more than 23%, Bloomberg reported.

Building permits, which point toward future construction, increased 6.1% to a 1.51 million annualized rate.

SEBI Board Meet Outcome

The Sebi board approved a slew of measures, including stricter regulatory norms for SME IPOs, a comprehensive overhaul of investment banking regulations, and an expanded definition of Unpublished Price Sensitive Information (UPSI). Sebi also approved reforms to boost ease of doing business for Debenture Trustees, ESG rating providers, InvITs, REITs, and SM REITs.

Direct Tax Collection

Centre’s net direct tax collection grew 16.45% year-on-year (YoY) to over ₹15.82 lakh crore till December 17 this fiscal, buoyed by higher advance tax mop-up, government data showed. Advance tax collection during the period rose 21% to ₹7.56 lakh crore. The collection includes corporate tax of over ₹7.42 lakh crore and non-corporate tax mop-up of ₹7.97 lakh crore.

(With inputs from Agencies)

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