Morning Update :– The US Federal Reserve decided to leave interest rates constant while also hinting at rate reduction in 2024, bringing in advances in global markets. The US market closed with big gains overnight, while other Asian markets edged higher in early session. The local market began with solid gains as well, with all sectoral indices trading in the green.
Sensex – Profit +671 Points at 70,256
Nifty 50 – Profit +187 Points at 21,113
Indian Market
FII AND DII
| FII Bought | 4,710.86 Cr |
| DII Sold | 958.49 Cr |
Indian Market News
- Wall Street leads most Asian markets; Kospi and Hang Seng rise by more than 1%.
- Fears over the Middle East drive up oil prices, but future borrowing rates will drop
- Following the Fed’s interest rate delay, gold shines
- Fed maintains current interest rates and adopts a dovish stance for 2024.
- Sensex and Nifty bounce back to close sharply ahead of the Fed’s decision.
- As the Fed anticipates lower borrowing costs in 2024, the Dow closes at a record high.
- Focus will be on Sunteck Realty stocks when promoters Starlight Systems and Satguru Infocorp step down.
- Fusion Micro Finance stock is under consideration as Warburg Pincus may sell its 9.25% interest.
- IRCTC stock could rise due to efforts to increase non-railroad catering
- Bond yields fall following the Fed’s policy decision.
Global Markets updates
GIFT Nifty
The GIFT Nifty, which gained 220 points, or 1.05 percent, suggests that the wider index in India is off to a good start. At 21,240, the Nifty futures were trading.
US Markets
Due to the dovish signals from the Federal Reserve, US stocks finished at yet another record high for the year on Wednesday, bringing the S&P 500 closer to its all-time high. The Dow Jones Industrial Average set a record, the S&P 500 exceeded 4,700, and the Nasdaq 100 continued its upward trend this year, reaching almost 50%. US Fed Chair Jerome Powell reiterated that policy has gone well into restrictive area, but added it’s excellent news that inflation is down without causing a jump in unemployment.
The S&P 500 gained 56 points, or 1.21 percent, to 4,700, the Nasdaq Composite climbed 168 points, or 1.16 percent, to 14,702, and the Dow Jones Industrial Average futures increased by 81 points, or 0.22 percent, to 37,171.
Asian Markets
With signals that the Federal Reserve would lower rates next year, Asian markets were mainly up on Thursday, joining a global rise in stocks and bonds that rekindled investor optimism across markets. China’s Shanghai Composite was up more than 0.5 percent, South Korea’s KOSPI was up 1.4 percent, and Hong Kong’s Hang Seng was up more than 2 percent. But the Nikkei 225 in Japan dropped 0.4%.
News Updates
Fed maintains current interest rates and adopts a dovish stance for 2024.
On December 13, the US Federal Reserve adopted a dovish stance for 2024 and held interest rates steady at 5.25–5.5 percent for the third consecutive meeting. Chairman Jerome Powell gave a strong signal that the US central bank will start reducing interest rates in 2024, indicating that reductions of 75 basis points would occur the following year.
Bond yields decline following the Fed’s decision.
The US Federal Reserve’s decision to hold interest rates steady, indicating rate decreases in 2024, put significant pressure on the yields on US Treasury bonds. The yield on the 10-year Treasury note was less than 4%, having hit a multi-year high of 5% in October. Right now, the yield is getting close to where it was in August.
US dollar index declines in response to the Fed’s 2024 forecast
The US dollar index, which measures the value of the US dollar relative to six other currencies, dropped to 102.9 following the announcement of the most recent Fed monetary policy decision. When the Fed reduces interest rates and adopts a more dovish perspective, it promotes investor borrowing, which eventually depresses the value of the dollar.
Dollar’s decline could strengthen the rupee
Due to ongoing demand from importers for the US dollar ahead of the US Federal Reserve meeting, the Indian rupee fell to a record closing low of 83.4 against the US dollar on December 14. On December 14, nevertheless, a weaker dollar and a dovish outlook from the US Federal Reserve might strengthen the home currency due to the decrease of interest rates.
Oil prices rise as OPEC+ demand is predicted.
OPEC maintained its prediction for the rise of global oil demand in 2023 at 2.5 million barrels per day (bpd), which was the same as last month’s assessment, in the widely followed monthly report from OPEC+. As a result, oil prices increased, with WTI Crude trading at $70 per barrel and Brent Crude selling at $75 per barrel, up 0.8 percent apiece.
Following the Fed’s interest rate delay, gold shines
After the US Fed signalled that its cycle of interest rate hikes was coming to an end and hinted at potential rate reduction for next year, gold prices increased by more than 1%.
US gold futures closed 0.2 percent higher at $1,997.30, while spot gold increased 1.3 percent to $2,004.79 per ounce.
Stocks in news
Biocon: The biopharmaceutical business announced that the $165 million Series C fundraising for its affiliated subsidiary Bicara Therapeutics Inc. has been completed. Following this capital infusion and Bicara’s share allocation, Biocon’s ownership of Bicara will drop to less than 20%, and Bicara will no longer be considered a Biocon associate business.
Sandhar Technologies: The producer of automotive components has contracted to lend five hundred thousand euros to its subsidiary, Sandhar Technologies Barcelona S L (STB), at an annual interest rate of ten percent.
Indian Railway Catering and tourist Corporation: In an effort to expand its brand and business throughout the country, Indian Railways’ hospitality and tourist division is currently expanding into a number of commercial sectors outside of railroads.
Uno Minda: In Ahmedabad, Gujarat, the business has opened its brand-new automobile seating systems facility under the Uno Minda TACHI-S Seating (UMTS) subsidiary. The facility will produce automotive seats’ mechanical components for passenger cars.
NBCC (India): The National Cooperative Development Corporation has placed an order worth Rs 1,500 crore with the state-owned construction company for the building of 1,469 warehouses and other agri-infrastructure at various locations in India as part of the world’s largest grain storage plan in the co-operative sector.
Gokul Agro Resources: The business announced that it has successfully acquired a 25 percent share in PT Riya Pasifik Nabati in Indonesia through its step-down subsidiary Maurigo Indo Holdings.
GMM Pfaudler: The Patel Family made an off-market inter-se transfer between promoters at a price of Rs 1,700 per share to acquire a 1% equity investment in GMM Pfaudler from Pfaudler Inc. through Millars Machinery Company. With their current investment of 25.18 percent, the Patel Family continues to be the company’s largest shareholder.
State Bank of India: At its IFSC Gift City branch in Ahmedabad, the nation’s biggest public sector lender will establish a 70 million euro line of credit with German development bank KfW to boost solar PV projects in India.
Sunteck Realty: Through open market sales of their own shares, promoters Starlight Systems and Satguru Infocorp Services left the firm. Thirty lakh shares, or 4.1 percent of paid-up stock valued at Rs 288.3 crore, were sold by Starlight Systems for Rs 479.47 per share, and thirty lakh shares were offloaded by Satguru Infocorp Services for Rs 481.65 per share. Nevertheless, at a cost of Rs 474.71 a share, Schroder International Selection Fund Emerging Asia purchased 10,36,718 equity shares in Sunteck.
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