Sensex is trading lower today in line with other Asian stocks 5

Investors monitored comments by Fed Waller on lowering rates 'carefully' as inflation is nearing the Fed's target goal

Jahnavi Prabhakar,

Economist,

Bank of Baroda    

Mumbai, January 17, 2024:

A slew of data was released in China including the GDP print for Q4CY23 which climbed up by 5.2%, tad lower than the estimate (5.3%). For CY23, the economy has expanded by 5.2% with uneven recovery and global agencies expect a slower growth in CY24 amidst continued weakness in property market and ‘subdued external demand’. In CY23, fixed asset investment climbed up by 3% with higher growth in infrastructure and manufacturing. For Dec’23, retail sales rose (7.4% from 10.1%) at a slower pace while industrial output (6.8% from 6.6%) climbed up. Globally, focus would remain on interest rate outlook after Fed official made similar comments as ECB officials on not rushing towards lowering rates till there is more clarity on inflation.

• Except Shanghai Comp, other global markets ended lower. Investors monitored comments by Fed Waller on lowering rates ‘carefully’ as inflation is nearing the Fed’s target goal. Developments around Red sea were carefully monitored. Sensex ended in red and was dragged down by losses in real estate and power stocks. It is trading lower today in line with other Asian stocks.
• Global currencies ended lower. DXY jumped by 0.9%, trading at nearly one-month high, owing to jump in treasury yields and uncertainty around timing of Fed’s rate cuts. JPY and GBP fell the most. INR was down by 0.2% following global cues and slight increase in oil prices. It is trading further lower today, in line with other Asian currencies.
• Barring yields in the UK, China and India, other global yields closed higher. US 10Y yield noted sharpest jump (+12bps) following hawkish comments from Fed Governor Waller. As a result, investors scaled back their expectations of an early rate cut by the Fed. India’s 10Y yield ended flat and is trading at similar levels even today (7.15%).