Sensex closes above 83,000 as markets react to US Fed rate cut 

The Indian stock market closed higher on Thursday, September 19, 2024, with the BSE Sensex ending above the 83,000 level. The benchmark index hit an all-time high, gained 236.57 points or 0.29 per cent to close at 83,184.80, while the Nifty rose 38.25 points or 0.15 per cent to finish at 25,415.80.

The market’s positive performance came in the wake of the US Federal Reserve’s decision to cut interest rates by 50 basis points, signalling the start of a new easing cycle. However, the gains were tempered by profit-booking at higher levels, particularly in the broader market.

Among the top gainers on the NSE were NTPC (2.38 per cent), Titan (1.82 per cent), Nestle India (1.77 per cent), Kotak Mahindra Bank (1.76 per cent), and Tata Consumer Products (1.26 per cent). On the flip side, BPCL (-3.41 per cent), Coal India (-1.52 per cent), ONGC (-1.34 per cent), Adani Ports (-1.25 per cent), and Shriram Finance (-1.25 per cent) were the top losers.

The market breadth was negative, with 2,722 stocks declining, compared to 1,255 advances on the BSE. A total of 4,075 stocks were traded, with 98 remaining unchanged. Notably, 241 stocks hit their 52-week high, while 53 touched their 52-week low.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said, “Today the benchmark indices registered a fresh all-time high of 25611.95/83773.61, but witnessed profit-booking at higher levels… Technically, after a gap-up open, the market faced selling pressure at higher levels.”

Ajit Mishra, SVP of Research at Religare Broking Ltd, noted the volatility in the market, stating, “The markets ended almost unchanged in a volatile expiry session, continuing the recent trend… The movement resembled the US market’s response to the rate cut announcement, suggesting possible further profit-taking.”

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said, “With the US Federal policy outcome now behind us, the focus will shift to RBI monetary policy next month, and the stance it will take on the interest rate front to prop up the economy. Technically, Nifty’s immediate target continues to be the psychological 26000 milestone, while the index has support at 25000 levels.”

Ankita Pathak, Chief Macro & Global Strategist at Angel One Wealth Ltd, provided insights on the US Fed’s decision, saying, “FOMC has started the new rates easing cycle with a 50 bps rate cut to 4.75-5 per cent, but the markets did not seem pleased about it. The broad sense has been 50bps is a sign of a slowing economy and is a wake-up call from the Fed.”

Deepak Jasani, Head of Retail Research at HDFC Securities, observed, “Nifty 50 settled at the highest closing level as risk appetite improved overall after the US Fed reduced the key rate and guided for more… Sell on news is the phenomenon seen in Indian markets – especially in the broader markets.”

In sectoral performance, the FMCG index rallied over 1 per cent, while the Media index shed over 1.5 per cent. The Bank Nifty closed at 53,037.60, up 0.54 per cent, while the Nifty Financial Services index gained 0.32 per cent to end at 24,403.65.

Ameya Ranadive, Sr Technical Analyst at StoxBox, highlighted the mixed performance across sectors, stating, “The mid- and small-cap indices possess immediate support levels at 50 DMA, the maintenance of which is crucial to counteract further profit-booking.”

Looking ahead, Tejas Shah from JM Financial & BlinkX noted, “ Nifty index is facing a lot of resilience around the crucial resistance zone of 25,500-25,550 levels, and we believe that Nifty will further outperform only if it is able to decisively close above this resistance zone.”

Foreign portfolio investors (FPI) were net buyers in the Indian stock market on September 18, 2024, with purchases amounting to ₹11,654 crore and sales at ₹10,500.31 crore, resulting in a net inflow of ₹1,153.69 crore. Domestic institutional investors (DII) also displayed buying interest, with a total buy value of ₹11,794.51 crore against sales of ₹11,642.20 crore, contributing to a net inflow of ₹152.31 crore. Meanwhile, clients and non-resident Indians (NRI) remained net sellers, with the former recording a net sale of ₹437.13 crore and the latter selling ₹7.47 crore worth of equities. Proprietary traders, however, were net buyers, registering a net purchase of ₹448.84 crore.

As the market closed, the India VIX, which measures volatility, fell by 6.94 per cent to 12.45, indicating a decrease in expected market turbulence. Traders and investors will closely watch global cues and domestic factors in the coming sessions to gauge the market’s direction.