The US central bank began an anticipated series of interest rate cuts on Wednesday with a larger end of the expected range of 50 basis points to 4.75-5.00%, which Federal Reserve Chair Jerome Powell said was intended to demonstrate policymakers' commitment to maintaining a low unemployment rate now that inflation has eased. "We made a good strong start, and I am very pleased that we did," Powell said at a press conference after the Fed cut its benchmark policy rate by 50 basis points to 4.75%-5.00%, citing improved confidence that the country's fight with high inflation was over.
Top 3 Leads Today
- Net direct tax collection rises 16.12% to ₹9.95 trillion till Sep 17.
- Cabinet accepts proposal for 'One Nation, One Election'.
- Weak bank deposit growth not due to higher MF inflows, says AMFI Chalasani.
Indian Markets
- The money markets were closed on Wednesday for Id-e-Milad.
- Stocks Spotlight: The Nifty 50 ended lower, giving up most of the gains from the previous two sessions, as caution prevailed ahead of the US Federal Open Market Committee's decision. The Nifty 50 closed at 25,377.55 points, down 0.2%, while the Sensex closed at 82,948.23 points, also down 0.2%.
International Markets
- US Stocks: The benchmark indices closed with small losses on Wednesday, well below their intraday highs, as the Fed cut interest rates by 50 basis points. The benchmark S&P 500 gained 1% on the rate cut news before falling 0.29% to 5,618.26. The Dow Jones Industrial Average closed 0.25% lower at 41,503.10, while the Nasdaq fell 0.31% at 17,573.30.
- Treasuries: Yields rose across the curve, particularly at the longer end on underlying concerns about inflation and easier financial conditions, and because the Federal Reserve marginally revised up its long-run outlook for the fed funds rate. The yield on rate-sensitive 2-year treasuries increased 3.8 basis points to 3.6297%, up from 3.592% Tuesday. The yield on benchmark 10-year notes jumped 6.6 basis points to 3.708% from 3.642% Tuesday.
- Currency: The dollar rose in volatile trade after the Federal Reserve dropped interest rates by 50 basis points on Wednesday. The dollar index was up 0.05% for the day, at 100.970. It has previously reached 100.21, the lowest since July 2023. The euro fell 0.01%, to $1.111275. The dollar stayed unchanged at 142.370 against yen.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 269 | 1280 | 701 | 604 | 50 |
| Financial Institution | 230 | 615 | 689 | 247 | - |
| Housing Finance Company | 230 | 312 | 139 | 16 | - |
| Investment Company | - | 530 | 6 | 101 | - |
| Private Sector Bank | 264 | - | - | 127 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.45 AXISBANK 05SEP34 | 2024-09-05 | 490 | 7.44 | 7.36 |
| 9.65 ADANIENTLTD 09SEP27 | 2024-09-09 | 477 | 9.76 | 9.65 |
| 7.72 THDC 02SEP34 | 2024-09-03 | 355 | 7.72 | 7.71 |
| 9.25 MOFSL 03SEP32 | 2024-09-03 | 278 | 9.22 | 9.16 |
| 9.03 CREDILA 04MAR26 | 2024-09-04 | 160 | 9.10 | 9.09 |
| 7.9918 L&T FINANCE 25MAR27 | 2024-09-05 | 125 | 8.02 | 8.02 |
| 7.36 IREDALTD 10SEP34 C 09SEP39 M | 2024-09-10 | 120 | 7.35 | 7.36 |
| 8.22 TATACAPITAL 13SEP34 | 2024-09-13 | 95 | 8.25 | 8.24 |
| 8.10 ABFL 07SEP29 | 2024-09-09 | 85 | 8.11 | 8.10 |
| 7.26 BOB 09SEP34 | 2024-09-09 | 80 | 7.26 | 7.26 |
| 8.0490 ADITYA BIRLA HFL 03DEC27 | 2024-09-05 | 70 | 8.04 | 8.07 |
| 8.8871 HEROFINCORP 06OCT26 | 2024-09-06 | 57 | 8.91 | 8.90 |
| 8.40 GODREJHSGFIN 05JAN28 | 2024-09-05 | 50 | 8.42 | 8.42 |
Source: Harmoney data analytics
Events This Week
September 19, Thursday:
- US International Transactions for Q2.
- US Unemployment Insurance Weekly Claims Report for Sep 14 week.
- US Weekly Export Sales.
- US Existing Home Sales for August.
September 20, Friday:
- US State Employment and Unemployment for August.
- India Bank Loan Growth for Sep 2 week.
- India FX Reserves Sep 13 week.
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