Indices trade with minor gains; banks surge for 6th day

The key equity indices traded with modest gains in mid-morning trade. The Nifty traded above the 25,400 level. Bank shares extended gains for the sixth consecutive trading session. Trading could be volatile due to weekly F&O series expiry today.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was up 285.04 points or 0.34% to 83,229.39. The Nifty 50 index rose 63.75 points or 0.25% to 25,441.30.

The Sensex and Nifty clocked an all-time high of 83,773.61 and 25,611.95 respectively in morning trade.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 0.95% and the S&P BSE Small-Cap index declined 1.42%.

The market breadth was weak. On the BSE, 1,205 shares rose and 2,496 shares fell. A total of 154 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tumbled 6.48% to 12.51.

Economy:

Fed Cuts Rates for the First Time in Years, Signaling Policy Shift:

The US Federal Reserve made a significant policy shift on Wednesday, reducing interest rates by 50 basis points. This marks the first rate cut in over four years, signaling a potential easing of the restrictive monetary policy implemented to combat inflation. The Federal Open Market Committee (FOMC) justified the decision, citing progress in curbing inflation and a shifting balance of risks. The rate cut is expected to lower borrowing costs for consumers and businesses, stimulating spending and investment.

While the 50-basis point cut was at the higher end of market expectations, analysts anticipate further rate reductions in the coming months. The Fed hinted at two more 25-basis point cuts this year, but market sentiment suggests more aggressive easing could be on the horizon. Despite the optimism surrounding rate cuts, Federal Reserve Chair Jerome Powell tempered expectations. He emphasized that the central bank does not intend to return to the era of ultra-low interest rates seen during the COVID-19 pandemic. Powell indicated that the Fed's neutral rate is likely to be higher than in the past, suggesting a less accommodative monetary policy stance going forward.

The Fed's rate cut will have global repercussions, particularly in emerging markets like India. Lower interest rates in the US can influence capital flows and exchange rates, affecting these economies' financial conditions.

IPO Update :

The initial public offer (IPO) of Western Carriers (India) received bids for 34,40,31,147 shares as against 2,08,68,467 shares on offer, according to stock exchange data at 11:15 IST on Thursday (19 September 2024). The issue was subscribed 16.49 times.

The issue opened for bidding on Friday (13 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 163 to Rs 172 per share. An investor can bid for a minimum of 87 equity shares and in multiples thereof.

The initial public offer (IPO) of Northern Arc Capital received bids for 58,31,94,417 shares as against 2,14,78,290 shares on offer, according to stock exchange data at 11:15 IST on Thursday (19 September 2024). The issue was subscribed 27.15 times.

The issue opened for bidding on Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 249 to 263 per share. An investor can bid for a minimum of 57 equity shares and in multiples thereof.

The initial public offer (IPO) of Arkade Developers received bids for 88,70,05,570 shares as against 2,37,75,719 shares on offer, according to stock exchange data at 11:15 IST on Thursday (19 September 2024). The issue was subscribed 37.31 times.

The issue opened for bidding Monday (16 September 2024) and it will close on Thursday (19 September 2024). The price band of the IPO is fixed between Rs 121 to 128 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.

Buzzing Index :

The Nifty Bank index rose 0.74% to 53,140.25. The index advanced 4.17% in the six consecutive trading sessions.

HDFC Bank (up 1.43%), AU Small Finance Bank (up 1.13%), Kotak Mahindra Bank (up 0.96%), IndusInd Bank (up 0.93%) and ICICI Bank (up 0.83%) and Axis Bank (up 0.77%) edged higher.

On the other hand, Bandhan Bank (down 1.95%), Federal Bank (down 1.24%) and Bank of Baroda (down 1.13%) edged lower.

Stocks in Spotlight :

Macrotech Developers fell 0.85%. The company said that it has executed securities purchase agreements with Ivanhoe Warehousing India Inc. for acquisition of their interest in the digital infrastructure platform entities in Maharashtra for Rs 239.56 crore.

B L Kashyap slipped 3.70%. The civil engineering company announced that it has secured new order aggregating to Rs 221 crore from SSS Realty & Co for construction work in Bangalore.

Global Markets:

Dow Jones Futures were up 229 points, indicating a positive opening in the US stock market today.

Asian stocks traded advanced on Thursday as investors assessed the Federal Reserve's decision to cut interest rates by a half-percentage point. Japanese shares climbed as the yen weakened ahead of the Bank of Japan's policy meeting on Friday. The Bank of England is also scheduled to announce its monetary policy decision later in the week.

While the Fed's rate cut provided a boost to regional markets, gains were tempered by the weak overnight performance on Wall Street. The outsized cut raised concerns about potential economic slowdown, leading to some cautious trading.

In China, investors await the central bank's decision on the benchmark loan prime rate on Friday. Analysts generally expect no changes, given Beijing's conservative approach to stimulus measures.

US stock market closed with modest losses and the dollar strengthened on Wednesday following the Fed's rate cut. The S&P 500 declined by 0.29%, falling slightly below its all-time high. The Dow Jones Industrial Average and Nasdaq Composite also experienced minor losses. Trading in Tupperware Brands remained suspended after the company filed for Chapter 11 bankruptcy protection, sending its stock plummeting.

US retail sales, unadjusted for inflation, increased 0.1% in August after an upwardly revised 1.1% gain, pointing to healthy consumer demand that continues to underpin the economy. Excluding autos and gasoline stations, sales advanced for a fourth month.