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Today 10 things you should know | Bonaz Capital

Bonaz Capital | The Nifty is likely to open on a flat note on Thursday tracking muted handover from Wall Street. The Nifty which witnessed selling pressure in most part of the trading session on Wednesday bounced back to towards in opening level making a ‘Hammer’ like pattern on daily charts.
The index made a ‘Hammer’ like pattern on the daily candlestick charts which suggest that market may be nearing a bottom. The crucial level for bulls to watch out is Wednesday’s low of 9,580. A breach of which could lead to further selling pressure.
The index closed above its crucial support level of 13-DEMA placed at 9,607. The way index managed to defend crucial support of 9,600 implies bulls have an upper hand. But, the momentum will only strengthen when the index closes above 9,650-9,700.

Wall Street ends mixed 

US stocks ended mixed after US Federal Reserve on expected lines raised rates for the second time this year by 25 bps; however, weaker than expected inflation numbers posed a question mark about the pace of economic growth.

Data showed US consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months.

But some investors worried about the Fed’s hawkish tone and that concerns about rate hikes were being reflected in the tech sector, which has led the S&P 500’s nearly 9-percent rally this year, said a Reuters report.

The Dow Jones Industrial Average rose 46.09 points, or 0.22 percent, to 21,374.56, the S&P 500 lost 2.43 points, or 0.10 percent, to 2,437.92 and the Nasdaq Composite dropped 25.48 points, or 0.41 percent, to 6,194.89.

SGX Nifty

The Nifty50 futures on the Singapore Stock Exchange were trading 35 points lower at 9,606 indicating a negative opening for the domestic market.bonaz capital

US Fed raises rates, unveils balance sheet cuts

The US Federal Reserve on expected lines raised interest rates for the second time in three months this year and said that it would begin rolling back the bound buyback program and other securities this year.

In lifting its benchmark lending rate by a quarter percentage point to a target range of 1.00 percent to 1.25 percent and forecasting one more hike this year, the Fed seemed to largely brush off a recent run of mixed economic data, said a Reuters report.

The Fed also gave a first clear outline on its plan to reduce its $4.2 trillion portfolios of Treasury bonds and mortgage-backed securities. “The initial cap for the reduction of the Fed’s Treasuries holdings would be set at $6 billion per month, increasing by $6 billion increments every three months over a 12-month period until it reached $30 billion per month,” said the report.

Wall St sees Fed announcing balance sheet shrinkage in Sep: Reuters Poll

Wall Street’s top banks pulled forward their expectations for the Federal Reserve to announce when it will begin reducing its $4.5 trillion bond portfolio to as early September after the central bank offered more details on the plan on Wednesday, a Reuters poll showed.

They also see Fed policymakers raising the bank’s key overnight borrowing rate one more time by the end of 2017 and three times in 2018 despite growing concerns that inflation would fall short of their 2 percent goal in the foreseeable future, according to the poll.

Next possible Fed rate hike as soon as March 2018

US Federal Reserve Chair Janet Yellen downplayed recent weakness in inflation and said she believes conditions for it to rise to the Fed’s 2-percent target are in place.

Traders now see March 2018 as the earliest meeting at which the US central bank would next lift its target for overnight borrowing costs, giving it about a 52 percent chance, based on Fed funds futures traded at CME Group, said a Reuters report.

Dollar bounces back from seven-month lows 

The dollar reversed early losses after the Federal Reserve raised U.S. overnight interest rates and said it was prepared to continue tightening monetary policy.

The dollar index, which tracks the greenback against six major currencies, fell to its lowest level since November 9 in early trading after the release of weaker-than-expected U.S. inflation and retail sales figures, said a report.

The dollar was last down 0.35 percent, to 109.70 yen, after falling as much as 1 percent and hitting its lowest level against the Japanese currency since April, the report added.

Commodity-linked currencies such as the Australian, New Zealand and Canadian dollars also pared gains against the US currency.

Oil sinks to November lows 

Crude oil prices slumped nearly 4 percent to their lowest close in seven months hit by an unexpectedly large build in gasoline inventories and an international outlook that suggests a big increase in supply in the coming year, said a report.

At 242.4 million, US gasoline inventories were 9 percent higher than the five-year average as demand was down 1.2 percent over the last four weeks when compared with a year ago, according to EIA.

After rising for three consecutive days, US West Texas Intermediate crude futures fell $1.73, or 3.7 percent, to settle at $44.73 per barrel, its lowest close since November 14. WTI has dropped 18 percent since its closing high of $54.45 in late February. Brent also slumped, losing $1.72, or 3.5 percent, to settle at $47 a barrel.

DIPP to discuss SOP for FDI proposals

The industry department will discuss the draft standard operating procedure (SOP) for clearing foreign investment proposals with other departments, including revenue and economic affairs, on Thursday.

The standard operating procedure (SOP) is being finalised after the abolition of Foreign Investment Promotion Board (FIPB), which was clearing FDI proposals earlier.

Union Cabinet approves bill to deal with bankruptcy at banks

The Union cabinet has approved a proposal to introduce a bill to deal with the bankruptcy of banks, insurers and other financial services firms, seeking to shield the financial system from systemic crises and protect consumers, said a report.

8 stocks under ban period on NSE

Security in ban period for the next trade date under the F&O segment include companies in which the security has crossed 95% of the market-wide position limit.

Securities which are banned for trading today include names like Bank of India, HDIL, Infibeam, Indiabulls Real Estate, Kaveri Seed Company, OBC, Ujjivan and Reliance Communication.