The Indian stock market is expected to open in the green as trends on SGX Nifty indicate a gap-up opening for the broader index in India with a gain of 155 points.
The BSE Sensex plunged more than 1,300 points to 55,669, while the Nifty50 has decisively broken crucial support levels of 16,800-16,900 and tanked nearly 400 points to 16,678, forming a Long Black Day kind of pattern on the daily charts.
As per the pivot charts, the key support level for the Nifty is placed at 16,490, followed by 16,303. If the index moves up, the key resistance levels to watch out for are 16,999 and 17,320.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms which could impact Indian as well as international markets:
US stocks ended sharply higher on Wednesday after the Federal Reserve delivered a widely expected interest-rate hike, and the S&P 500 recorded its biggest one-day percentage gain in nearly two years. Stocks initially see-sawed after the announcement, then the indexes strengthened. The S&P 500's advance of almost 3 percent was the strongest since May 18, 2020.
The Dow Jones Industrial Average rose 932.27 points, or 2.81 percent, to 34,061.06, the S&P 500 gained 124.69 points, or 2.99 percent, to 4,300.17 and the Nasdaq Composite added 401.10 points, or 3.19 percent, to 12,964.86.
Asian shares tracked Wall Street gains on Thursday after the U.S. central bank raised interest rates by 50 basis points but sounded a less hawkish tone than some had feared, lifting investor sentiment but sending yields and the dollar lower.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.52 percent, although trading was thin with Japanese and Korean markets closed for public holidays.
Trends on SGX Nifty indicate a gap-up opening for the broader index in India with a gain of 155 points. The Nifty futures were trading around 16,844 levels on the Singaporean exchange.
Fed lifts rates by half point, starts balance sheet reduction June 1
The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and the U.S. central bank's chief made an appeal to Americans struggling with high inflation to be patient while officials take the hard measures to bring it under control.
In a widely expected move, the Fed set its target federal funds rate to a range between 0.75 percent and 1 percent in a unanimous decision, and Fed Chair Jerome Powell said policymakers were ready to approve half-percentage-point rate hikes at upcoming policy meetings in June and July.
LIC IPO Day 1: 67 percent issue booked; employees portion fully subscribed, policyholders 2 times, retail investors 60 percent
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO was subscribed 67 percent on May 4, the first day of bidding. The LIC policyholders lead the initial bout of buying in the insurer's IPO as they have subscribed 1.99 times the portion reserved for them. The employee reserved portion has been subscribed 117 percent, while retail investors portion has been subscribed 60 percent. Non Institutional investors have subscribed 27 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
RBI hikes repo rate by 40 bps
All of a sudden-and entirely unexpected-the Reserve Bank of India (RBI) on May 4 increased the repo rate by 40 basis points to 4.4 percent for the first time in almost two years since the start of the pandemic in 2020. One basis point is one-hundredth of a percentage point. This comes when inflation has been rising to an 18-month high amidst a rebound in domestic economic activity.
From October 1, 2019, all banks had to mandatorily link their floating-rate retail loans to an external benchmark – RBI’s repo rate, three/six-month treasury bill yields or any other benchmark prescribed by Financial Benchmark India Private Ltd (FBIL). Most banks had chosen the repo rate as their benchmark. For such retail borrowers, the effective interest rate is the repo rate plus a spread specified by the bank, which includes operating cost and credit risk premium.
Forex reserves 'sizeable', outlook for external sector resilient: RBI Governor
India’s foreign exchange reserves are “sizeable” and the outlook for the country’s overall external sector is bright, Reserve Bank of India (RBI) Governor Shaktikanta Das said during his surprise 40-basis-point repo rate hike announcement on May 4.
“Potential market opportunities have opened up due to geopolitical conditions and the recent trade agreements. Strong revenue guidance by major information technology (IT) companies also bodes well for the overall external sector outlook in 2022-23,” Das said.
FII and DII data
Foreign institutional investors (FIIs) have net offloaded shares worth Rs 3,288.18 crore, whereas domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,338 crore worth of shares on May 4, as per provisional data available on the NSE.
Oil extends gains after news of EU's Russian oil ban proposal
Oil prices edged higher at the start of Asian trade on Thursday, extending gains from the previous session, after the European Union proposed new sanctions against Russia that included an embargo on crude oil in six months.
Brent crude futures rose 22 cents to $110.36 a barrel by 0:02 GMT. WTI crude futures rose 15 cents to $107.96 a barrel.
China's services activity falls at second sharpest rate on record - Caixin PMI
China's services sector activity contracted at the second-steepest rate on record in April, as COVID curbs halted the industry, leading to sharper reductions in new business and employment, a private-sector survey showed on Thursday.
The Caixin services purchasing managers' index (PMI) stood at 36.2 in April, the second-lowest since the survey begun in November 2005 and down from 42 in March. The index hit a record low of 26.5 in February 2020 during the onset of the pandemic.With inputs from Reuters & other agencies