Global markets: SGX Nifty, First Republic Bank shares to FOMC meeting — key triggers for today

CurrencyVeda Analysis on International Trade

World market update: Tuesday’s US stock market closed higher despite tight range trading in US stock futures throughout the FOMC meeting. The US dollar and US bond yield have decreased in early morning deals as the market is buzzing with today’s FOMC meeting’s 25 basis point rate hike. WTI crude oil is down 0.42 percent in the morning session, showing that the price of crude oil is still under pressure. After a severe sell-off, First Republic Bank’s share price rose sharply due to probable government support for attracting purchasers.

These are several important catalysts that could influence the Indian stock market right now:

US stock exchange
The US stock market saw purchasing interest ahead of the FOMC meeting results as the market anticipates a 25 basis point increase in interest rates. On Tuesday, the S&P 500 index increased by 1.30 percent, the Dow Jones increased by 0.98 percent, and the Nasdaq surged by 1.58%.

Marc Despallieres, Chief Strategy and Trading Officer at Vantage, commented on the rally in US stocks as follows: “Wall Street’s preferred volatility indicator fell as stock prices rose again, as a rise in banks and government assurances allayed worries that the recent financial turmoil would develop into a serious crisis. Whatever the cause, the synchronised efforts to end the banking turbulence have temporarily restored some measure of normalcy. The so-called fear barometer for the market, or VIX, had its greatest two-day decline since May.”

Focus is on the FOMC meeting
The conclusion of the two-day FOMC meeting and the US Federal Reserve’s rate hike decision are anticipated today. The market will continue to pay attention to the US Fed’s remarks on the US bank issue, though.

Ritika Chhabra, a quant macro strategist at Prabhudas Lilladher PMS, commented on the outcome of the FOMC meeting “The Fed will increase the FFR by 25 bps at the next FOMC meeting despite worries about the ongoing financial crisis. Reiterating its dedication to restoring price stability, the central bank. Without modifying its monetary policy, it will use liquidity facilities to try to alleviate concerns about financial stability.”

“The cost of capital rises if the US Fed raises interest rates, which lowers stock prices. Foreign institutional investors (FIIs) have begun to leave Indian and other emerging equities markets after the US Fed announced that interest rates would likely rise. Since we import a lot of crude oil, FIIs’ ongoing sales cause the rupee to weaken and raise the cost of imports. Our current account balance is negatively impacted as a result of this “explained Senior Vice President of Master Capital Services Arvinder Singh Nanda.

The share price of First Republic Bank
stocks of the crisis-affected Tuesday’s morning session saw a violent sell-off for First Republic Bank. However, the First Republic Bank share price strongly recovered following the news of the US government’s prospective backing to entice purchasers and ended 29.50% higher at $ 15.77 per share on the NYSE.

According to Marc Despallieres, “First Republic Bank gained roughly 30% on excitement over a fresh proposal under discussion to assist the regional lender.

Today’s SGX Nifty
Investors are anticipating the conclusion of the FOMC meeting, which is anticipated today, hence the SGX Nifty is trading cautiously today. Today’s SGX Nifty began trading at 17,138 and eventually reached an intraday high of 17,198 levels.

Asian stock exchange today
The Shanghai index rose 0.71 percent, the Hang Seng soared 2.60 percent, and the South Korean KOSPI rose 1.06 percent in early morning trade on Wednesday. The Japanese Nikkei is up 1.81 percent.

Price of crude oil
Due to increased weekly inventory speculations and US stockpiles, crude oil prices kept falling. Early morning Asian markets are reporting WTI crude oil at a price that is about 0.35 percent lower than when it last closed.

USD exchange rate
While the market awaits the outcome of the FOMC meeting today, the US dollar is trading cautiously. The dollar index dropped 0.05% to 102.850 levels.

“Traders believed that banking stress could prevent the Federal Reserve and the Bank of England from rising interest rates much higher, if at all, later this week,” Marc said. “The dollar pared early losses on Tuesday.”

Yield on US bonds
Early in the Asian trading day, the yield on US bonds decreased even more. As the US 30 year bond yield increased 0.20 percent to 3.728, the US 10 year bond rate fell 0.38 percent to 3.592.

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