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The FOMC’s decision to keep interest rates stable at 5.25-5.5% reflects confidence in the upward economic trajectory of the US market. Despite maintaining a forecast to reduce rates to 4.6% by 2024, the latest “dot plot” indicates a change in expectations, with fewer members anticipating multiple rate cuts this year. With signs of economic resilience and a willingness to tolerate temporary fluctuations in inflation, the Federal Reserve is fueling bullish sentiment in US markets
Similarly, as anticipated, the People’s Bank of China left lending rates unchanged in March, keeping the five-year rate steady at 3.95% after a 25 basis point reduction in February, aligning with efforts to boost economic growth amid the challenges of the real estate sector and low levels of consumption. trust.
India’s HSBC preliminary manufacturing Purchasing Managers’ Index (PMI) hit a 14-year high of 59.2 in March, indicating significant expansion in the manufacturing sector. Despite a slight drop in the preliminary services PMI, the headline composite PMI rose to an eight-month high of 61.3, indicating solid economic activity. Both the manufacturing and composite PMI have consistently remained above the 50-point threshold for expansion, demonstrating sustained growth. The improving PMI numbers reflect India’s strong economic performance, with positive implications for future growth prospects.
“In a landscape marked by economic changes, the firm hand of the Federal Reserve, along with the unwavering stance of the People’s Bank of China, India’s impressive PMI figures underline resilience in the face of challenges. As value investors, we recognize that amidst volatility lies opportunity, and these indicators offer valuable information for prudent long-term investments.”
The overall Indian market performed better during the week. Real estate, automobiles, metals, power, PSU banks, media and oil and gas sectors rose, and the sector that fell the most was IT. FII were net sellers of Rs 8,365 crore and DII were net buyers of Rs 19,251 crore.
Major benchmark indices witnessed a rollercoaster ride before closing the week in positive territory. Initially, prices fell to a five-week low amid growing concerns over frothing in the mid-cap and small-cap segments. Nifty and Sensex prices closed the week at 22096.75 and 72831.94, up 0.33% and 0.26% respectively. However, the market rebounded as bargain hunters intervened following the US monetary authorities’ announcement of a possible series of interest rate cuts throughout the year. Authorities intend to cut interest rates three times this year, aligning with December quarterly forecasts. Investor sentiment was further boosted by optimistic forecasts of robust manufacturing and services sector activities in India in March. Additionally, the US 10-year bond yield retreated from a nearly three-month high, reflecting growing expectations for a cut in the key benchmark rate.
On Nifty, prices are expected to be in the range of 21,750-22,350 levels and if the index closes decisively below 21,800, then 21,650 may be the next support for the Nifty 50, while the immediate resistance is likely to be 22200 and then 22,300. Holding above 22000 could take Nifty towards the crucial overhead resistance around 22,200-22,400 levels in the near term. Any decline from 21850 could drag the Nifty back to the 21,700 level in the near term.
On Banknifty, strong support is currently situated at the 46000 level. The Bank Nifty index persists in a “buy dip” stance until the support below 45800 is convincingly breached at the close. In the coming levels, we can expect R1 to be placed at 47000 levels and S1 at 46200 levels. In the short term, the index could advance towards 47,500; a decisive move beyond 47,200 could push it towards 48,000.
