Indian equity futures declined on Thursday as investors reduced their bets on rate cuts following the latest United States inflation data. The IFSC Nifty Futures was trading at 22,555, a decline of 1.08 per cent as of 5 pm on Thursday. The United States consumer price index data, released on Wednesday, exceeded estimates for the third consecutive time. The core consumer price index, which excludes food and energy costs, increased by 0.4 per cent in March from February, according to the United States Labour Department. Year-on-year, it advanced by 3.8 per cent. The 10-year United States bond yield rose and was trading at 4.56 per cent. United States equity markets declined on Wednesday following the inflation data. The S&P 500 ended Thursday’s session at 5,160.6, a decline of 0.95 per cent; the Dow ended the session at 38,461.5, falling by 1.09 per cent.
“March’s inflation print exceeding estimates will constrain the Federal Reserve’s ability to cut rates. This acceleration in price has dashed hopes of a rate cut in June. This year began with market expectations of six rate cuts. The expectation has now been revised down to a maximum of three, perhaps two. Even now, a total of 50 basis points rate cut is possible this year, and these will be backloaded,” said VK Vijayakumar, Chief Investment Strategist of Geojit Financial Services.
Indian equity markets were closed for Eid on Thursday. On Wednesday, the Indian equity market closed at new highs, and the Sensex closed above the 75,000 mark for the first time. However, sentiment turned cautious towards the end of the session. Going forward, quarterly earnings, especially in high-weight sectors like information technology and finance, will determine the Indian market’s trajectory, said analysts.
First Published: Apr 11 2024 | 5:38 PM IST