Early gains evaporated in the Indian stock markets on Thursday as key indices closed flat reflecting investor indecision while they wait for signs on the health of America’s economy. This hesitation was in response to rather dismal U. S labor market numbers and remarks from an influential Fed official hinting at the possibility of rate cut.
The benchmark of Nifty 50 and the BSECNX also known as Sensex has remained unchanged due to economic volatility.
EOD Today, 10:26 am, IST the Nifty 50 index showed resilience at 25,201 points. 35 points, S&P BSE Sensex on its part was up, literally remaining flat at 82,333. 5 points. Market participants were keenly monitoring the flows and changes that were happening in the US economy since it is one of the major determinants of the states of the global economy including the Indian one.
There are still doubts regarding the rate of growth in the U. S. economy; these doubts were magnified after a worse-than-expected performance in the country’s labor market. Such concerns accompanied by a comment by a Federal Reserve official enhanced the probability of a steep interest rate reduction in the next Federal Reserve meeting due on September 18. The chances for a 50-basis-point cut escalated to 45 percent from 38 percent the previous day.
Interest Rate of the United States and Its Effect on the Indian Markets
Thus, the United States monetary policy can influence the global fund inflows into emerging economies such as India, for instance, by lowering interest rates on their financial assets. Nonetheless, the market analysts are calling the cautionary as the disappointing data in the United States may be indicative of bigger issues.
The head of research at Geojit Financial Services Vinod Nair said ‘The weaker than expected growth numbers persist the fear of US economy slowing down impacting domestic market’. “
Experts seem to forecast that there will be some sort of break soon after there has been tense movement in recent days.
Indian markets have been on quite a tear recently, and the Nifty 50 for instance recently had its 14-day winning streak broken. This period of gains had the index increasing by about 5% hitting record high rates. But the analysts opine that there could be some consolidation from here as the traders are still to get a more definitive picture of the situation in the US economy. “It is hard to see significant upside from here until more information comes out”, said two analysts.
Broader Asian Markets Rebound
While the trading in India remained flat, most other Asian stock markets were positive on Thursday. Under the index of MSCI Asia ex-Japan the value increased by 0. They lost near about 2% in the previous session and gapped 4% up today.
Performance Analysis on Sector Wise in the Indian Market
In fact, among 13 broad sectors in India, seven respectively registered marginal gains during the session. But the domestic small and mid-cap focused returns remain enduring well where the small-cap index was up 1%. 2% while the benchmark index was up by 1% and the mid-cap index was up by 0. 3 percent respectively and have set record high levels.
Noteworthy Stock Movements
Some of the other stocks in focus during the day involved some dramatic price movements. Linde India rose 3% yesterday after it signed an agreement to acquire a 60% stake in Larsen&Toubro Shipping and Property division. 7 After the announcement of a plant sale deal being signed in Tata Steel’s industrial gas supply assets. Zomato also saw its bright outlook after seeing its stocks go 6% after JPMorgan increased the price target to ₹340 from ₹208 on strong support from Blinkit.
Conclusion: What Keeps Indian Markets Aflot until the U.S. Economy Makes Sense?
While the Indian stock market has been on a high for quite some time now with the rupee touching an all-time low, the uncertain outlook for the US economy has made traders sit on the fence. The next decision might be seen in the very meeting of the Federal Reserve Scheduled for September 18, which can provide more clarity and set the direction for Indian shares from affecting the global markets.
