What should investors do after Fed rate cut? Will RBI follow suit? Here's what market wizard Anil Singhvi thinks

It’s the same old story of hits and misses when it comes to market expectations and central bank actions. However, in its September review, the Fed Chair-led Federal Open Market Committee (FOMC) surprised many by delivering more than expected: a rate cut of 50 basis points instead of the widely-anticipated 25 bps. But can the humble global investor expect more in 2024 from the central bank, which meets eight times a year?

The Fed's 50-bps cut on September 18 is the first downward revision in the key US lending rate in more than four years, with its dot plot also signalling another half a percentage point reduction this year.

Zee Business Managing Editor Anil Singhvi believes that one can expect the US central bank to deliver another 50 bps of reduction in 2024 followed by 100 bps in 2025 and then another 50 bps in 2026. The US central bank has given clear signals about more rate cuts in the future amid signs of strength in the world's largest economy and no fear of a recession.

Fed Chairman Jerome Powell has said that US labour market is "still at very solid levels" with no sign of a recession and with solid growth and lower inflation. 

Emerging markets like India can expect inflows after the Fed move, which has also made it easier for the Reserve Bank of India (RBI) to cut rates, according to Singhvi. The Indian central bank is scheduled to meet in October. 

The market wizard believes that buying momentum on Dalal Street will now gain traction, with the highly anticipated Fed review finally out of the way.

ALSO READ: Market guru Anil Singhvi's strategy for the day | Fed surprises economists with better-than-expected 50 bps rate cut; what next?

Here's how he interprets the outcome of the FOMC review for investors and traders on Dalal Street: 

What should traders do?

• Risk emanating from the big event now behind
• Dalal Street is in a broad buying trend
• Maintain 'buy on dips’ strategy
• Fresh highs in Dow & S&P to strengthen buying trend
• One can expect seesaw moves on Dalal Street & Wall Street for this week
• Wall Street expected to give a clear direction from Monday

What should investors do?

• Pace of buying to increase on Dalal Street
• There's a higher possibility of RBI rate cuts now
• Time for investors to buy their favourite stocks now
• Buying to intensify in midcap & smallcap stocks
• No cause for concern as long as Nifty50 holds 24,750 

Catch all the latest stock market updates here. For all other news related to business, market, tech and auto, visit Zeebiz.com.