Sensex Is Trading Lower Today

Barring FSTE (flat) and Shanghai Comp (lower), other global indices closed higher

Sonal Badhan,

Economist,

Bank of Baroda   

Mumbai, January 29, 2024: As US Fed begins its 2-day meeting today, it is largely expected to keep policy rates on hold. Investors will also look for guidance on timing of future rate cuts, as growth is easing slower than anticipated. Slew of other economic data points pertaining to labour market, manufacturing and services activity index, will also shed light on direction of US rates. Separately, similar economic strength is not currently visible in other major economies. For instance, in China, industrial profits fell by (-) 2.3% in CY23, following (-) 4.4% decline between Jan-Nov’23. In Australia, retail sales in Dec’23 fell by (-) 2.3% (MoM), after posting 1.6% increase in Nov’23. Most significant decline was noted in discretionary spending (mainly household items). Only sales of food recorded an increase in Dec’23.

• Barring FSTE (flat) and Shanghai Comp (lower), other global indices closed higher. US indices ended in green ahead of key economic reports including the jobs report and Fed rate decision. Gain in technology stocks provided further support. Sensex rebounded led by sharp gains in oil & gas and power stocks. However, it is trading lower today while other Asian indices are trading higher.
• Global currencies ended mixed. DXY gained by 0.2% awaiting Fed’s rate decision and series of economic reports. GBP held steady ahead of BoE’s decision. ECB closed lower amidst dovish commentary by ECB officials. INR is trading flat today, while other Asian currencies are trading mixed.
• Except Japan and India, other global yields closed lower. 10Y yields in UK, US and Germany fell the most. Investors reacted to weak macro data from Europe (Germany Ifo) and more than expected dip in Dallas Fed manufacturing index. They also await Fed’s rate decision. India’s 10Y yield closed broadly flat, as oil prices eased. It is trading a tad lower today at 7.16%.

(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.)