Sensex Is Trading Higher Today

Global indices closed lower. US indices retreated as the focus shifted towards upcoming macro data for more guidance on Fed's next move

Sonal Badhan,

Economist,

Bank of Baroda

Mumbai, February 26, 2024: New home sales in the US rose by 1.5% (MoM) in Jan’24, slowing from 7.2% increase in Dec’23. The slowdown is attributed to seasonal factors-cold weather impacting both sales and construction. Sales are expected to get impacted in the coming months as 30Y fixed mortgage rate is again up as Fed’s rate cut expectations have been pushed back from May to June. However, as supply-side crunch persists in existing home markets, there might be scope for new home sales to improve. Markets also await data on labour markets, PCE, production, retail sales, for more guidance on rates. Separately, in Japan core CPI rose by 2% in Jan’24 (est.: 1.8%), slowing from 2.3% in Dec’23, mainly reflecting base effect and dip in energy costs. Higher than expected CPI print signals pressures due to wage growth and investors continue to anticipate end of negative rates in BoJ’s Apr’24 meeting. 

• Global indices closed lower. US indices retreated as the focus shifted towards upcoming macro data for more guidance on Fed’s next move. Amongst other indices, Shanghai Comp, dropped the most. Sensex too ended in red led by losses in metal & consumer durable stocks. However, it is trading higher today, while other Asian stocks are trading lower.
• Except JPY (lower) and CNY (flat), other major currencies closed higher against the dollar, with EUR gaining the most. DXY fell by 0.1%. Investors will closely monitor the upcoming macro print from the US. INR strengthened amidst inflow of foreign funds and despite an increase in international oil prices. It is trading flat today, while other Asian currencies are trading mixed.
•  Barring yields in Asia, other global 10Y yields ended higher. Investors await ECB President Lagarde’s remarks for policy guidance. Wage growth in UK and declining GfK consumer confidence has also raised uncertainty over timing BoE’s rate cut cycle. India’s 10Y yield fell by 1bps. However, it is trading a tad higher today at 7.07%.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)