Signal of interest rate cut will have an impact on the market

Mumbai (Uttam Hindu News): Global The domestic stock market, which has created a new history last week due to strong economic data at the local level and tremendous buying due to improvement in the growth forecast of the Reserve Bank of India (RBI) amid positive trend in the stock market, will raise the interest rate of the Fed Reserve in the new year next week. The clear signal of reduction will continue. Last week, BSE’s 30-share sensitive index Sensex jumped 1658.15 points i.e. 2.4 percent and touched 71 thousand points for the first time on the weekend, due to increase in capital flows towards large caps of developing markets due to 10-year bond yield falling below four percent in America. Crossed the psychological level and reached 71483.75 points.

Similarly, the Nifty of the National Stock Exchange (NSE) rose by 487.25 points or 2.32 percent to reach its all-time high of 21456.65 points. Like the big companies, there was tremendous buying in medium and small companies also in the week under review. Due to this, BSE Midcap increased by 907.44 points or 2.6 percent to 36198.35 points on the weekend. Also, Smallcap strengthened by 978.84 points or 2.4 percent and for the first time crossed the psychological level of 42 thousand points and stood at 42083.21 points. According to analysts, the market hit new highs last week, encouraged by positive indicators from both the domestic and global front. Strong domestic industrial production and manufacturing PMI data as well as positive comments from RBI on the country’s gross domestic product (GDP) forecast contributed to the market rally. The fall in US bond yields and a clear indication of interest rate cuts by the US central bank Federal Reserve in the year 2024 have further raised market expectations. Investors are confident that the easing of monetary policy will remove the clouds of sluggishness over US economic growth in the second half of fiscal year 2024. Also, the IT sector in the domestic market rose by 7.6% last week on expectations of increased demand from America, especially increase in AI-based opportunities and interest rates cut by the Fed in the year 2024.

Vinod Nair, head of research at investment advisory firm Geojit Financial Services, said, “We expect the market to remain firm in the near term due to high valuations, concerns over El Nino and a slowdown in world GDP.” Barring the fall in the day, the remaining four days were bullish. On Monday, Sensex rose by 102.93 points to 69928.53 points and Nifty rose by 27.70 points to 20997.10 due to all-round buying at the local level amid mixed trend in the world market due to the possibility of central banks of developed countries starting to cut interest rates from the new year. Reached the mark. Despite the rise in the world market in the hope of keeping the policy rates unchanged in the ongoing meeting of the Federal Reserve in America, the Sensex fell 377.50 points on Tuesday under the pressure of profit booking in seventeen groups including energy, utilities, oil and gas and realty at the local level. It fell by 69551.03 points and Nifty fell by 90.70 points to 20906.40 points.

Sensex rose 33.57 points to 69584.60 and Nifty 19.95 on Wednesday due to local buying in fourteen groups including healthcare, industrials, utilities, auto, realty and services amid mixed trend in the world market ahead of the Fed Reserve’s decision on policy rates. Sensex rose by 929.60 points to 70514.20 points and Nifty to 256.35 points. Jumped to 21182.70 points. On Friday, Sensex rose by 969.55 points to 71483.75 points and Nifty jumped by 273.95 points due to strong buying at the local level due to the US ten-year bond yield falling below four percent due to the clear indication of Federal Reserve’s interest rate cut. It became 21456.65 points.