Bears will continue to have upper hand at the bourses on Thursday as high interest rates are here to stay. Global stocks, led by the US, are declining, after the US Federal Reserve said that the higher interest rates are likely to stay for at least one year. FOMC left policy rates unchanged at 5.25-5.50 per cent. Announcing the Fed’s decision, Powell stressed at length the difficulty of forecasting and the mixed record of forecasters.
The Nifty futures at Gift City is ruling at 19850, signaling a 50-point gap down opening for Nifty. According to analysts, the mood at the D-Street has changed from over-bullish to somewhat cautious. Analysts expect the correction to continue, which is ‘healthy’.
The US Federal Chairman Jerome Powell said, “If the economy comes in stronger than estimates, the central bank will have to do more to bring down inflation and soft landing will be its primary objective.”
Deepak Jasani, Head of Retail Research, HDFC Securities, said that surging oil prices could force central banks to keep interest rates at higher levels.
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Equities across Asia-Pacific region are down in the region of 0.5-0.9 per cent.
Subho Moulik, Founder & CEO, Appreciate, said, “As US headline inflation as well as most US inflation component measures decline, the Fed has decided to pause rate hikes for the moment. If the macroeconomic outloook continues to hold steady, rate cuts in 2024 (an US election year) could point to significant upside for US markets overall in the next 6-12 months barring any large downside surprises arising from Ukraine or China.”