Markets had been expecting another big interest rate increase and the investors had factored in a 75 basis point increase. However, they were caught off guard by the Fed’s outlook as far as the need for additional hikes.
Geojit Financial Services views on today’s market: Investors can remain optimistic but be cautious since India’s valuations are on the higher side
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: “While the Fed’s 75bp rate hike and reiteration of the hawkish message were on expected lines, indication that the terminal rate is likely to be 4.6% was higher than market expectations. US 10-year bond yield spiking above 3.5% and the dollar index above 111 are unnerving for equity markets. Now the market feels that the probability of a US recession has increased to 75%. In the backdrop of sharply slowing Eurozone and China, this is bad news for global growth.
The big question from the Indian market perspective is whether India’s outperformance will continue in the present global risk off context. Investors can remain optimistic but be cautious since India’s valuations are on the higher side. Financials, capital goods, select autos, telecom and construction related stocks can be bought on declines.”
Cryptocurrency prices today under pressure: Bitcoin falls 3%, ether 6%; Uniswap gains
Cryptocurrency prices today came under pressure after the US Federal Reserve delivered another big interest-rate hike and warned of economic pain from the aggressive policy tightening still to come. The Fed’s determination to raise rates to levels that hammer inflation at the cost of sliding asset prices sent a chill across global markets. (Read More)
Nifty likely to open 150 pts lower on Fed hike news
The Nifty could gap down by around 150 points or 0.8% at the opening, cues from its derivative SGX Nifty show. This comes after the US Fed delivered the third straight 75 basis point hike overnight, taking the Fed Funds Rate to 3-3.25% range, the highest since before the 2008 Global Financial Crisis, and as priced in by the markets. (Full Story)
Reliance Securities Stock in Focus for today: Prince Pipes
STOCK IN FOCUS
Prince Pipes (CMP Rs.594)
In view of the healthy volume and series of strategies for the next level of growth, we have our BUY rating on the stock, with a Target Price of Rs700.
EICHERMOT (PREVIOUS CLOSE: 3682) SELL
For today’s trade, short position can be initiated in the range of ₹3700-3730 for the target of Rs.3600 with a strict stop loss of ₹3800.
JSW STEEL (PREVIOUS CLOSE: 685) SELL
For today’s trade, short position can be initiated in the range of ₹690-696 for the target of Rs.670 with a strict stop loss of ₹702.
NTPC (PREVIOUS CLOSE: 169) BUY
For today’s trade, long position can be initiated in the range of ₹165- 167 for the target of Rs.172 with a strict stop loss of ₹163.
Stocks to Watch: SBI, REC, Wipro, SpiceJet, Power Finance Corp, Triveni Turbines, Dodla Dairy, Ashoka Buildcon, IDBI Bank, Kirloskar Oil Engines
Ambuja Cements, Delta Corp, RBL Bank, PVR, Can Fin Homes, and Escorts Kubota will be under the F&O ban list for Thursday. These stocks will be under the ban for the F&O segment as they have crossed 95% of the market-wide position limit (MWPL), as per the NSE. (Read More)
DoT introduces Draft Telecom Bill to provide relief to stressed carriers, eases M&A rules
The telecom department has put the Draft Indian Telecommunications Bill, 2022 up for stakeholder comments, by October 20, under which the framework for mergers and acquisitions will be simplified and relief, write-off or deferment of dues may be allowed in cases of payment default in extraordinary circumstances.
The bill seeks to simplify the framework for mergers, demergers and acquisitions, or other forms of restructuring, by only requiring intimation to the licensing authority. (Read More)
Reliance Retail eyes Sephora India rights
Reliance Retail is in advanced talks to get the rights for beauty retailer Sephora in India, two people familiar with the development said. The move could see Sephora operations transfer from Arvind Fashions Ltd., its current partner, to Reliance Retail. Arvind Fashions holds Sephora’s master franchise rights for India.
The move comes as Reliance Retail sets its eyes on the beauty and personal care market in India after dominating the apparel retail segment in the country. India’s beauty retail market is expected to reach ₹2 trillion by 2025 driven by a higher propensity to shop online. (Full Story)
INDIA RUPEE-Rupee seen at record low after Fed signals more aggressive rate hikes
The Indian rupee is seen hitting a record low against the dollar on Thursday after the U.S. Federal Reserve hiked rates by 75 basis points on Wednesday and indicated more large rate hikes.
The rupee is expected to open around 80.25-80.30 per U.S. dollar in early trades, down from 79.9750 in the previous session. The previous record low for the local unit was 80.12 reached late in August.
The Fed’s interest rate projections were “way more hawkish than expected” and the “damage we are seeing on Asian currencies should see rupee move comfortably below 80 at open”, a trader at a Mumbai-based bank said.
“It is quiet clear that what happens after the open will depend upon the RBI (Reserve Bank of India),” the trader said.
The RBI had swiftly intervened when rupee dropped below 80, according to traders. (Reuters)
Multibagger chemical stock turns ₹1 lakh to ₹2 crore in 5 years after 2:1 bonus shares
Shares of Jyoti Resins and Adhesives are one of the multibagger stocks in India. This multibagger chemical stock recently trade ex-bonus that turned out like icing on the cake for long term shareholders of the company. This was the first occasion when the chemical stock has given bonus shares in 2:1 ratio that means two bonus shares for each shares held by its shareholders. In last five years, this chemical stock has surged from ₹25 to ₹1,656 apiece levels, appreciating more than 6,500 per cent in this period. (Read More)
Future Enterprises defaults on ₹15.73 cr interest dues on non-convertible debentures
Kishore Biyani’s Future Enterprises announced defaulting on over ₹15.73 crore interest dues on non-convertible debentures (NCDs). The due date for payment of interest on NCDs was September 20, 2022. These debentures are secured and in two series. On Wednesday, the company’s shares witnessed upside despite broader bearish markets.
The interest was due on Rated, Listed, Secured, Redeemable, Non-Convertible Debentures in series XVI-C and series XVI-D. There are four investors in both series as on the date of default. ( Full Story)
India’s palm oil imports to jump on rising demand, lower prices
India’s palm oil imports in 2022/23 could jump 9% from a year earlier on a rise in domestic consumption and as competitive prices allow the tropical oil to regain its share in the world’s biggest market, a Reuters survey showed on Wednesday.
The higher buying could help top producer Indonesia in bringing down ballooning inventories and support benchmark Malaysian palm oil prices, which have nearly halved from record highs earlier this year.
Palm oil imports in the new marketing year starting from Nov. 1 could rise to 8.4 million tonnes from 7.7 million tonnes this year, according to the average estimate of nine dealers and one industry official polled on the sidelines of the Globoil conference in Agra.
“Consumption will improve in the new year as prices have corrected and demand has also been rising with opening up of the economy,” B.V. Mehta, executive director of Solvent Extractors’ Association of India, said.
Indian demand weakened this year due to COVID lockdowns and record high edible oil prices, he said. (Reuters)
INDIA BONDS-Bond yields seen higher tracking U.S. peers, hawkish Fed to hurt
Indian government bond yields are expected to rise in early trading on Thursday, tracking a spike in U.S. yields, after the Federal Reserve hike interest rate by 75 basis points and signalled more increases to battle elevated inflation.
The benchmark Indian 10-year government bond yield is seen in a 7.25%-7.30% band, a trader with a private bank said. The yield ended at 7.2326% on Wednesday.
“There should be a gap up opening in terms of yields today but, after the initial selloff, we may see yields stabilising, as the outcome was not completely out of the box,” the trader said.
“It is also possible that after the initial few minutes, yields may stabilise and some buying may emerge.” (Reuters)
After crude, Centre now expedites plan to set up strategic gas reserve
India is expediting a plan to set up a strategic gas reserve on the lines of its strategic petroleum reserve (SPR), amid a global energy crisis triggered by the Russia-Ukraine conflict that has sent fuel prices soaring. Existing LNG tunnels and exhausted oil wells are likely to be utilized for the gas reserve, along with the construction of new underground infrastructure such as large salt caverns. (Full Story)
Wipro sacked 300 employees after discovering they were working concurrently for rival technology services companies
Wipro Ltd sacked 300 employees after discovering they were working concurrently for rival technology services companies, including Infosys Ltd and Tech Mahindra Ltd, toughening its stance against moonlighting and reaffirming that the company will not tolerate dual employment.
All sacked employees had fewer than three years’ work experience.
Infosys warned its employees in an email earlier this month against the practice, TCS called it an ethical issue. (Full Report)
Gold gains ₹152; silver jumps ₹333
Gold prices in the national capital rose by ₹152 to ₹49,871 per 10 grams on Wednesday, amid a rise in international precious metal prices along with rupee depreciation, according to HDFC Securities.
In the previous trade, the yellow metal had closed at ₹49,719 per 10 grams.
Silver also jumped by ₹333 to ₹57,406 per kilogram from ₹57,073 per kg in the previous trade. (PTI)
Rupee falls 22 paise to close at 79.96 against dollar on forex outflows
The rupee declined by 22 paise to close at 79.96 against the US dollar on Wednesday, tracking the strength of the American currency in the overseas markets and a muted trend in domestic equities.
Forex traders said investors are awaiting the US Fed’s policy decision on interest rates for further cues. Moreover, risk-off mood and firm crude oil prices weighed on the local unit.
At the interbank foreign exchange market, the domestic currency opened at 79.81 per dollar. It hovered in a range of 79.79 to 80.01 during the session.
The rupee finally settled at 79.96, down 22 paise over its previous close. On Tuesday, the rupee had closed 7 paise higher at 79.74. (PTI)
The Fed’s 75-bps rate hike: Powell says ‘strongly resolved’ to bring inflation down
The Federal Reserve on Wednesday raised the key US interest rate again and signalled more hikes are coming as it battles soaring prices – an aggressive stance that has raised fears of an eventual recession.
It was the third consecutive increase of 0.75 percentage point by the Fed’s policy-setting Federal Open Market Committee (FOMC), continuing the forceful action to quell inflation that has surged to the highest in 40 years.
Speaking at a news conference after the Federal Reserve raised its key interest rate, Fed Chair Jerome Powell said officials were ‘strongly committed’ to curbing inflation. (Full Story)
US stocks fall, dollar gains as Fed unveils latest big rate hike
Wall Street stocks tumbled and the dollar rallied Wednesday after the Federal Reserve announced another large interest rate increase and signalled it expects more monetary tightening ahead to fight inflation.
The US central bank announced its third consecutive interest rate increase of 0.75 percentage point, continuing the forceful action to tamp down inflation that has surged to the highest in 40 years.
US stocks had climbed ahead of the announcement, following positive sessions on leading European bourses and declines in Asia.
Equities gyrated after the Fed press release before taking a final decisive push lower during Fed Chair Jerome Powell’s news conference. The S&P 500 ended down 1.7%.
“The higher-for-longer narrative kicked in,” Art Hogan, analyst of B. Riley Wealth Management, said of the market’s reaction to an announcement that was more “hawkish” than expected. (AFP)
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