Market Today: GIFT Nifty sinks; Dow Jones bleeds on Fed rate cut; DAM IPO

The central bank delivered its 3rd consecutive rate cut but signaled a slowdown in future reductions, leaving investors wary. The Fed trimmed its benchmark interest rate by a widely anticipated 25 bps

Stock Markets Today, December 19: Benchmarks, Sensex and Nifty, are likely to open on a muted note, influenced by global trends following the US Federal Reserve's interest rate cut, along with indications from GIFT Nifty suggesting a gap-down start.

 

The central bank delivered its third consecutive rate cut but signaled a slowdown in future reductions, leaving investors wary. Late Wednesday, the Fed trimmed its benchmark interest rate by a widely anticipated 25 basis points (bps), bringing it to a target range of 4.25 per cent-4.5 per cent. However, the Fed’s accompanying guidance dampened optimism.

 

The updated ‘dot plot’ suggests only two more rate cuts in 2025—half of what was forecasted in September. 

 

 

Back home, early indications suggest a gap-down start. At 6:42 AM, GIFT Nifty Futures were down 309 points, trading at 23,948. 

 

In the previous session, the Sensex shed 502.25 points (0.62 per cent) to close at 80,182.20. The Nifty50 fell 137.15 points (0.56 per cent) to settle at 24,198.85.  

Global cues 

Asia-Pacific markets slid on Thursday, following a sharp sell-off on Wall Street. In Asia, focus shifted to Japan as the Bank of Japan (BOJ) concluded its two-day policy meeting. The central bank is expected to maintain its target rate at 0.25 per cent, consistent with its ultra-loose monetary stance. The Yen showed slight strength against the US dollar, trading at 154.57 in the morning. 

 

Meanwhile, Nikkei fell 1.4 per cent, and the Topix dropped 1.27 per cent. Kospi declined 1.84 per cent, while ASX200 plunged 1.91 per cent. 

 

Wall Street saw a dramatic sell-off. The Dow Jones nosedived 2.58 per cent, marking its first 10-day losing streak since 1974. The S&P 500 dropped 2.95 per cent, while the Nasdaq sank 3.56 per cent. The slide followed the Federal Reserve’s decision to cut its borrowing rate by 25 basis points.

 

Now, investors await US Q3 GDP data, coupled with initial jobless claims for the week-ended December 14, coupled with Q3 PCE prices.

 

Domestic cues

 

Investors will closely monitor the Nifty50 expiry scheduled for today, which is expected to influence market volatility and trading sentiment.

  Sebi Board meet outcome

 

The Securities and Exchange Board of India (Sebi) approved several major regulatory changes, in its latest board meeting. These include stricter norms for listing small and medium enterprises (SMEs), an expanded definition of price-sensitive information, and revamped regulations for investment bankers. 

 

Also Read: RBI dials down use of NDFs to fight dollar, balance rupee stability

  FII, DII show

  FIIs continued to offload Indian equities, selling shares worth Rs 1,316.81 crore on December 18. While, DIIs countered this trend by purchasing equities worth Rs 4,084.08 crore, providing some support to the markets.

 

Also Read: Mutual funds increase exposure to banking, IT stocks amid outperformance

 

IPO market 

Inventurus Knowledge IPO (Mainline) and Yash Highvoltage IPO (SME) will debut on the bourses.

 

Meanwhile, a fresh wave of Mainline IPOs is ready to hit the market. Concord Enviro IPO, Sanathan Textiles IPO, Mamata Machinery IPO, DAM Capital IPO, and Transrail Lighting IPO are all set to open their public issues

 

Newmalayalam Steel IPO (SME) is opening for subscription. Identical Brains IPO (SME) enters its second day of subscription, while NACDAC IPO (SME) races toward the finish line, with its final day of bidding.

 

Commodity check

  Oil prices edged higher on Wednesday as US crude inventories fell and the Fed delivered a widely expected rate cut. However, gains were limited as the Fed signaled a slower pace of future cuts. Brent crude settled at $73.39 a barrel, up 0.27 per cent, while WTI rose 0.71% to $70.58. 

 

Gold, meanwhile, tumbled over 2 per cent to a one-month low, pressured by a stronger dollar and rising bond yields following the Fed's cautious outlook. Spot gold dropped to $2,589.91 per ounce, while US gold futures slipped to $2,653.30.

 

Here's how analysts are assessing today's (December 19) trading session:

 

Shrikant Chouhan, head of equity research at Kotak Securities

  We believe that the current market texture is weak, but a fresh sell-off is only possible if it dismisses 24150/80000. If it falls below this level, the market could slip to 24050-24000/79700-79500. On the other hand, if it rises above 24250/80400, we could see a quick pullback rally up to the 20-day SMA or 24350-24400/80700-81000.

 

Rupak De, senior technical analyst at LKP Securities 

The sentiment appears weak and could worsen if Nifty sustains below 24,200. A decisive fall below 24,200 may trigger a correction towards 23,850 in the short term. On the upside, 24,400 is likely to act as resistance.