Sensex, Nifty likley to open higher amid strength in global stocks

Stock market today: Domestic benchmark indices Sensex and Nifty on Thursday (August 1) are likely to open higher on the back of strength in global stocks. At the last count, GIFT Nifty futures — an early indicator of the Nifty50 index — are up 92.85 points or 0.37 per cent at 25,106 ahead of the opening bell on Dalal Street.

Important triggers that can affect the markets today are: 

-US Federal Reserve (Fed) kept the interest rate unchanged in the policy decision yesterday but indicated cuts in September. 

-Crude oil surpasses the $81 mark, metals up two to four per cent. 

-Corporate earnings 

-FII consecutively sells in the last three days, however, DIIs buy for seven consecutive days. 

What happened at US Fed meet? 

The US Federal Reserve has left interest rates unchanged at a 22-year high of 5.25 per cent to 5.5 per cent, as inflation continues to cool, hinting that a rate cut might come as soon as September.

"Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's 2 per cent inflation objective," the Federal Open Market Committee (FOMC), the Fed's policy-setting body, said on Wednesday in a statement after a two-day policy meeting.

Regarding the Fed's statement, the language reflected an improvement compared to the June meeting. Previously, the policy statement mentioned only "modest further progress" in reducing price pressures, Xinhua news agency reported.

The committee reiterated that it does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 per cent.

In addition, the committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, the statement said.

When asked whether a September rate cut is a reasonable expectation, US Federal Reserve Chair Jerome Powell told reporters at a press conference on Wednesday afternoon that "we have made no decisions about future meetings. That includes the September meeting".

The Fed chair, however, noted that "the broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate".

Noting that the last couple of inflation readings have "added to confidence", Powell said, "we've seen progress across all three categories of core PCE inflations, goods, non-house services, and housing services."

Further, on Wednesday, the domestic benchmark Sensex rose by nearly 286 points to close at a record high while Nifty settled above the 24,950 level on Wednesday, extending their winning run to the fourth day on gains in metal, power, and select auto shares.

The 30-share BSE Sensex settled higher by 285.94 points or 0.35 per cent at 81,741.34 -- its all-time closing high -- with 20 of its components advancing and 10 ending lower. The index opened higher and jumped 372.64 points or 0.45 per cent to hit an intra-day high of 81,828.04.

The NSE Nifty rose 93.85 points or 0.38 per cent to close at an all-time high of 24,951.15. During the day, it surged 127.3 points or 0.51 per cent.

(With inputs from agencies) 

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