Fed Interest Rate Decision - All we need to Know " Pre Market Report Nifty & Bank Nifty 19 Sep 2024

Summary

In the pre-market report for September 19, 2024, the focus is on Nifty and Bank Nifty's future projections following the FED's interest rate decision and press conference. The FED's rate cut and future projections led to mixed market reactions, with the US market closing marginally negative. The video discusses the FED chairman's calm approach to questions about the economy, labor market, and inflation, projecting a positive outlook. It also covers Indian ADRs, FI trade data, and open interest analysis, suggesting a potentially flat or mild positive market opening. Key technical levels for Nifty and Bank Nifty are highlighted, along with a disclaimer advising viewers not to base investment decisions on the content.

Takeaways

• 📉 The FED announced a 50 basis points interest rate cut, which was widely expected and influenced the US markets.
• 💬 The FED Chairman, in a calm and detailed press conference, covered multiple topics, including the state of the labor market and inflation outlook.
• 📊 The new interest rate projection for the year-end is 4.4%, which is 75 basis points lower than the June projection of 5.1%.
• 📅 The FED projects two more 25 basis point cuts by the end of the year, during the November and December FOMC meetings.
• 📈 US markets reacted slightly positively to the new interest rate projections, although there was profit booking, leading to a marginal negative close.
• 🛠️ The labor market is viewed as strong, similar to 2019 levels, and there are no signs of an impending recession, according to the FED.
• 🏠 Inflation is expected to average 2.3% this year and 2.1% next year, close to the FED's 2% target, but not falling below it.
• 💡 The unemployment rate projection was revised from 4.1% to 4.4% for the year-end.
• 🇮🇳 The Indian market is expected to open with a 30 to 50 point gap down based on current trends.
• 📉 TCS is projected to have a 27% upside potential according to an investment firm, while FIAs and DAs were net buyers in the Indian market.

Q & A

What was the main topic of the pre-market report video on September 19, 2024?

The main topic of the pre-market report video was the future projection of the stock market, particularly focusing on the Nifty and Bank Nifty, in light of the Federal Reserve's interest rate decision and the subsequent press conference by the Fed Chairman.

What significant announcement was made by the Federal Reserve in the video?

The Federal Reserve announced a 50 basis point interest rate cut, which was in line with market expectations. Additionally, they provided future interest rate projections for the current year end, projecting a rate of 4.4%, which is 75 basis points lower than the June month projection of 5.1%.

How did the S&P fund react to the anticipation of the interest rate cut before the Fed's announcement?

The S&P fund increased continuously for seven trading sessions before the Fed's announcement, anticipating a 50 basis point interest rate cut.

What was the market's reaction to the Fed Chairman's press conference?

The market was volatile during the Fed Chairman's press conference but remained within a narrow band. The final market reaction was a slight negative close, with the Dow Jones down 0.25%, S&P down 0.29%, and Nasdaq down 0.3%.

What was the Fed Chairman's outlook on the economy and labor market during the press conference?

The Fed Chairman expressed that he does not foresee any recession or elevated slowdown in the economy. He also stated that the labor market is strong and comparable to its status in 2019.

What was the projected 12-month average inflation rate for the current year according to the Fed Chairman?

The projected 12-month average inflation rate for the current year was expected to be around 2.3%.

How did the Indian ADRs perform in line with the Indian market as mentioned in the video?

Indian ADRs, particularly IT stocks, were down by over 2%, while banks closed positively, with HDFC Bank increasing by 0.75% and ICICI Bank by 1.67%.

What was the significance of the FIA and DII trade data in the cash market as discussed in the video?

FIA and DII were net buyers in the cash market, with FIA net buying for 1,154 CR rupees and DII for 152 CR rupees. This was significant as it indicated a positive market sentiment and was a good indicator for future market movements.

What technical indicators were highlighted for Nifty and Bank Nifty in the video?

For Nifty, the video highlighted a small bearish Candlestick pattern with upper and lower shadows, indicating a close to the upward sloping resistance trend line. For Bank Nifty, a long bullish Candlestick pattern was observed with above-average volumes, suggesting market strength.

What were the key support and resistance levels mentioned for Nifty and Bank Nifty?

For Nifty, the key support level was at 25,300, and resistance was at 25,500. For Bank Nifty, the short-term resistance was near the psychological level of 53,000, with support levels at 52,000 and 51,700.