Sensex Is Trading Higher Today, In Line With Its Asian Peers

Global stocks ended mixed. Investors monitored robust earnings report while also assessing the future path of interest rates

Dipanwita Mazumdar

Bank of Baroda   

Economist

Mumbai, February 9, 2024: In the US, jobless claims data was just shy of expectations, falling to 218k for the week ending 3 Feb 2024 and compared to previous week’s level of 227k. Thus, certain degree of tightness in the labour market is still prevalent. Richmond Fed President in his recent speech reiterated to be patient before embarking on the rate cut cycle. ECB Chief Economist also spoke of requiring more evidence of inflation returning to the targeted level and also emphasised not to rush on to the rate cut cycle. BoJ Governor on the other hand gave assurance that easy financial conditions would prevail in the region, even post negative interest rate era. On domestic front, RBI’s policy remained on expected lines, with no change in policy rates and stance. Inflation forecasts reflect that space for rate cut is available in Q2.

• Global stocks ended mixed. Investors monitored robust earnings report while also assessing the future path of interest rates. Nikkei surged the most by 2.1%. Shanghai Comp too rose by 1.3% anticipating more government support. US stocks too advanced. However, Sensex fell by 1%, led by a sharp fall in banking stocks. However, it is trading higher today, in line with its Asian peers.
• Global currencies ended mixed. DXY rose by 0.1% as a drop in US jobless claims reaffirmed the case for pushing back rate cuts. On the other hand, JPY fell sharply as BoJ Deputy Governor stated that the central banks is unlikely to raise interest rates sharply. INR ended flat. It is trading a tad weaker today, while other Asian currencies are trading mixed.

Except Japan (tad lower), global yields closed higher. Risk on sentiments

increased as investors have already priced a delayed response in terms of

easing financial conditions by major central banks. Further, certain degree of

resilience in macro data and uncertainty over inflation trajectory also validate the

same. India’s 10Y yield rose by 1bps and is trading at the same level today.

(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.)