Hello reader, hope you’re doing well. Markets may witness upward trajectory in Wednesday trades following sharp gains in the US markets after the country’s inflation moderated, thus raising hopes that the Fed may take a dovish stance in the wake of cooling inflation. Another global factor that could help keep local traders in good stead is the lowering of a key interest rate by the People’s Bank of China. The move was aimed at injecting additional funds into the banking system to prop up growth. Investors will also pay close attention to FOMC Chairman Jerome Powell’s comments on the policy outlook. In case the Fed keeps rates unchanged, the feel good factor could have a rub off effect on benchmark Nifty that may help the index reach its all-time-high of 18888 sooner than later.
Important points to note:
- Since the market momentum continues to be strong, it can take the Nifty to a new record high, which is only 172 points away. Global support from the mother market US and strong domestic macros have the strength to usher in a new record.
- But Nifty is unlikely to race past the new record highs since valuations are challenging and the US inflation cues are not so favourable.
- Even though US CPI inflation has declined to 4 %, the core inflation, which is more significant, is stuck at around 5%. Therefore, the Fed is likely to sound hawkish even while pausing rates today.
- CNXPSE crosses the 5000 mark for the first time.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.