Is Fed Rate Announcement the next big event for Nifty?

Global and Domestic Markets have often witnessed major reactions post US Federal meeting decisions. US Fed rate decision announcement is due today at 11:30 PM (IST).

International Market Outlook

If we look at the Asian Indices, Japanese shares are lower today as Nikkei 225 is down by 0.76%. European markets finished lower on Tuesday, CAC 40 was down at 0.75% while Germany's DAX shedded off 0.56% and London's FTSE 100 was down by 0.56%.

Not much movement was seen on Wall Street, the Dow ended up 0.13%, while the S&P 500 lost 0.18% and the Nasdaq dropped 0.45%.

The impact of the falling Oil prices, seen yesterday, across the bourses faded off. NYMEX Crude oil closed at 36.34, days low being 35.96.

As the view goes, International Markets are evenly poised with S&P 500 futures hovering at 2025-2005 over the past two trading sessions and DAX has formed a trading range of 10039 -9890. A big move in either direction can be expected as it has been seen in the past US Fed Rate decisions.

The US Fed is expected to keep the interest rate on hold but the language of the Fed whether dovish or hawkish in tone will lead the market directions. Crude oil which has been a leading indicator has corrected from recent high of 39.02 to last five days low of 35.96 which essentially means that crude short term trend will change to sell if it goes further below 35.96.

Nifty at a glance

Yesterday, for the first time, NIFTY Futures saw a correction of 100 points from range high of 7593 since the Union Budget on 29th February. The fall was brought about by heavy selling in Pharma and IT companies. NSE Pharma Index fell from recent high of 11800 to 11325 yesterday, a fall of 3.5 per cent. In today’s morning trades SunPharma & Dr Reddy are among the Top Losers of NIFTY 50.

NSE IT Index was also seen under performing in comparison to its benchmark NIFTY. Yesterday NSE IT Index fell to its recent low of 10730 from its previous high of 11088 made on 4th March, which is a fall of 500 points approximately.

Small Cap Index Outlook

Small Cap Index is struggling to trade above 4850. Market is expected to  remain volatile with immediate support is at 4675 and resistance is at 4850. US Fed rate decision announcement today at 11:30 PM will also have ample impact on the Small Cap Index. In the last trading hour, yeasterday Small Cap Index was trading in a narrow range of 53 points.

Stocks that can be bought at correction:

Scrip	Sector	LTP	Fall	Post Budget Rise
LLOYDELENG	HOUSEHOLD GOODS	205.95	-41%	16%
NOCIL	CHEMICALS	44.4	-32%	14%
HIMATSEIDE	TEXTILES AND APPAREL	197.55	-30%	34%
GRANULES	PHARMACEUTICALS	118.45	-27%	12%
NILKAMAL	HOUSEHOLD GOODS	1082.95	-23%	11%
TVTODAY	MEDIA AND PUBLISHING	298.85	-10%	1%

·         % FALL  is movement of share from 4^th Jan to 29^th Feb

·         % RISE  is movement of share from 29^th Feb to Last Trade Price

With the inflation data being benign, the hopes of a rate cut have surged and banking stocks have seen buying throughout yesterday. In today’s morning session, Bank of Baroda and Kotak Bank are among the Top Nifty 50 gainers. NSE Bank Index closed at 15350 near the range high of 15475 in the last trading hour, yesterday. NIFTY is in a sideways range forming a cluster since past 7 trading days and all Global markets are keenly watching the US Fed policy Statement tone, which will lay the course of next interest rate hike in United States.

Source: www.dynamiclevels.com