On Thursday, equity investors saw a Rs 6 trillion increase in wealth as intraday deals sent markets surging more than 1%. As a result, during the day, the market capitalization of all BSE-listed companies exceeded Rs 380 trillion.
The Nifty50 recovered the 22,000 barrier to reach a high of 22,080 during the day, while the S&P BSE Sensex surged 781 points intraday to reach a high of 72,882 level. It recorded a 241-point intraday rise. The BSE MidCap and SmallCap indices rose 1.8% and 1.7%, respectively, during the day, indicating a stronger recovery in the wider markets.
The US Federal Reserve kept interest rates unchanged at 5.25–5.5 percent this evening, assuring investors that they still expect to cut them by three-quarters of a percentage point by the end of 2024. This gave investors relief.
Ten of the Fed's nineteen members, who initially formed a median opinion in December, predict that the policy rate would decline by the end of this year, even if they perceive inflation as "elevated". But by 2025, they expect fewer rate reductions.
The uncertainty regarding the US Fed decision is over with the Fed keeping the rates unchanged, and refraining from a hawkish message. The Fed chief's statement that 'inflation has eased substantially while the labor market has remained strong' conveys conviction about the soft landing of the US economy. This favorable global construct will have its positive impact on thr Indian markets ," said V K Vijayakumar, Chief Investment strategist, Geojit Financial Services.
With the US Fed maintaining its current rate of interest and avoiding a hawkish message, the uncertainty around its decision is now resolved. The Fed Chair's declaration that "inflation has eased substantially while the labor market has remained strong" demonstrates confidence in the US economy's gentle landing. The Indian markets will benefit from this favorable global environment, according to V K Vijayakumar.
