Sensex, Nifty today: Benchmark indices Sensex and Nifty are likely to take big hit today following a 3 per cent plunge in US stocks overnight after the US Federal Reserve cut the interest rate by 25 basis points for the third straight time, but said it would be cautious about further rate cuts.
The FOMC policy rate now stands in the range of 4.25-4.50 per cent. The central bank's new projections showed policymakers see it ending 2025 in the 3.75-4 per cent range. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated, the Fed policy statement read. The committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective, the Fed statement suggested.
"In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," it said.
Dow Jones tanked 1,123.03 points or 2.6 per cent to 42,326.87, the Nasdaq tumbled 716.37 points or 3.6 per cent to 19,392.69 and the S&P 500 plunged 178.45 points or 3.0 per cent to 5,872.16. This may shun hopes of a Santa rally in the last two weeks of the month.
"Momentum suggests that the psychological level of 24,000, followed by 23,900, which aligns with the 200-day SMA and the 61.8 per cent Fibonacci retracement of the recent rally, will act as key support levels for Nifty on the weekly expiry day," saod Rajesh Bhosale, Technical Analyst at Angel One.
Nomura had expected the dot plot and Powell’s press conference to be hawkish, emphasizing that the pace of rate cuts is likely to slow in 2025. It panned out, with Asian markets across Japan, China and Korea falling up to 1.2 per cent.
The dollar index, which tracks the movement of dollar against a basket of six major world currencies, hit 108 level. The 10-year US bond yield edged higher to 4.5 per cent. Data showed FPIs were net seller to the tune of Rs 1,316.81 on Wednesday.
Santa rally
JM Financial earlier noted that there was a high probability of "Santa Rally' occurring between the last 2 weeks of the calendar year and the 1st week of the new calendar year -- December 15 to January 5, resulting into a broad-based buying in the overall market.
In the last 10 years, the NSE benchmark closed in the green on eight occasions. Only in 2018 ad 2022, the 50-pack Nifty settled lower in the two-week period, JM Financial said. "The average and the median return stands at 1.5 per cent and 1.3 per cent, respectively. A move of less than 1.5 per cent and more than 1.5 per cent has been observed on 5 occasions each," the broking firm said.