The market is buzzing, and not in a good way. With the Gift Nifty today plunging over 340 points and the US Federal Reserve taking a cautious stance on rate cuts, Indian equities like Nifty and Sensex are bracing for more turbulence. Let’s break down what’s happening, why it’s happening, and what it could mean for traders and investors.
The US Fed’s Cautious Approach on Rate Cuts
Last night, the US Federal Reserve announced a widely expected 25 basis points rate cut, bringing the target range to 4.25-4.5 percent. But that wasn’t the headline-grabber. What shook the markets was Fed Chair Jerome Powell’s conservative outlook for 2025—just two rate cuts, down from the four projected earlier. Powell emphasized the need to keep inflation in check, stating that the central bank won’t rush into aggressive easing anytime soon.
Global Markets React to Fed’s Stance
The ripple effect of the Fed’s announcement was immediate. US equity markets faced a bloodbath, with the Dow Jones dropping nearly 1,100 points, or 2.5 percent—the steepest fall in recent times. Meanwhile, the S&P 500 and Nasdaq didn’t fare much better, tumbling 3 percent and 3.3 percent, respectively.
Bond yields surged, with the two-year US Treasury yield climbing to 4.35 percent and the 10-year yield reaching levels unseen since May. Adding fuel to the fire, the US dollar strengthened, with Bloomberg’s dollar index hitting its highest point since November 2022.
The Gift Nifty’s Morning Blues
The aftershocks of the US market’s plunge were felt in the Gift Nifty live today, where futures on the IFSC dropped 340 points, or about 1.4 percent, early Thursday morning. This comes on the back of a three-day losing streak for Indian equity benchmarks Nifty and Sensex. The pessimism appears set to continue, with domestic pressures like a weakening rupee and stretched valuations compounding the woes.
What’s Putting Pressure on Indian Markets?
Indian equities are caught in a perfect storm of global and domestic challenges. Let’s unpack these issues:
- Weakened Rupee: The Indian rupee’s depreciation against the dollar adds pressure, making imports costlier and impacting sectors like oil and technology.
- Stretched Valuations: Indian markets have been riding high for months, but valuations are now looking overheated, leading to profit-booking.
- Global Headwinds: With Fed rate cuts being scaled back, risk assets globally are under scrutiny. A strong US dollar and rising bond yields are shifting investor sentiment toward safer bets.
Nifty’s Technical Levels to Watch
On the technical front, things are looking shaky. Experts warn that if the Nifty 50 breaks below 24,050, it could quickly slide to its November low of 23,873. Vidnyan Sawant,Gift Nifty today, Head of Research at GEPL Capital, predicts that breaching the 23,800 level might push the index into a deeper negative trend, with the next support level at 23,250. Conversely, any upward movement could see resistance at 24,500.
Domestic Resilience: Is a Recovery Possible?
Despite the doom and gloom, there’s a silver lining. India’s domestic growth story remains robust, and upcoming events like the RBI’s monetary policy meeting and the Union Budget could offer a shot in the arm. Nirav Karkera, Head of Research at Fisdom, believes that while inflationary risks persist, domestic interest and a favorable growth outlook could help markets bounce back sooner than expected.
Bond Yields and Dollar Strength: A Double-Edged Sword
Bond markets are also making waves. Rising yields on US Treasury bonds signal tighter liquidity, which could dampen equity market sentiment further. Meanwhile,
the strengthening US dollar is a mixed bag—it benefits exporters but makes life tougher for import-dependent sectors in India.
What Should Investors Do Now?
In volatile times like these, Gift Nifty today, a cautious approach can make all the difference. Here are a few pointers:
- Diversify: Spread your investments across asset classes to reduce risk.
- Focus on Quality: Stick with fundamentally strong stocks that can weather the storm.
- Stay Informed: Keep a close eye on global cues like the Gift Nifty live chart today, as well as domestic developments.
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Conclusion
Gift Nifty today, The market is clearly in a state of flux,
and the Fed’s cautious stance on rate cuts has only added fuel to the fire. For Indian equities, the pressure from global and domestic factors could persist in the short term. However, with a robust domestic economy and upcoming policy announcements, a recovery is not off the table.
