Turbulent Thursday

Nifty50: 17,076 ▼ 75 (-0.4%)
Sensex: 57,925 ▼ 289 (-0.5%)

Hi there!

In New Zealand, heartbreak isn't a personal matter anymore. It's a government affair.
Yes, you read that right. The New Zealand government has launched a campaign called 'Love Better' for teens to help them deal with their breakups. With the help of a video, the campaign is encouraging teenagers to unfollow or delete their exes on social media in order to move on.
Additionally, it aims to provide Generation Z a platform to talk to professionals about their bad breakups.
But what about the heartbreaks caused by markets, we ask!

• The markets continue to remain volatile.
• Out of the Nifty50 universe, 30 stocks declined.
• Investors are jittery after the US Fed meeting yesterday.

Among the Nifty sectoral indices, FMCG (+0.3%) and Pharma (+0.2%) were the top gainers, while PSU Bank (-1.7%) and Realty (-1.0%) were the top losers.

What’s trending

⭐ M&M’s electric arm raises funds 

The automaker (-0.3%) has received an investment of ₹600 crore from International Finance Corporation (IFC). The funds will be invested in M&M’s newly incorporated subsidiary – Last Mile Mobility. This subsidiary will focus on manufacturing electric three-wheelers and small commercial vehicles.   

⭐ Anupam Rasayan inks supply deal

The speciality chemical maker (+2.8%) has signed a letter of intent worth ₹984 crore with a Japanese chemical company. According to the agreement, Anupam Rasayan will supply new-age advanced intermediate and active ingredients for the next six years.

⭐ Nazara Tech’s new acquisition 

The gaming company’s (+0.2%) subsidiary has acquired a stake in a US-based sports media company Pro Football Network. The company’s subsidiary bought a 73.2% stake in Pro Football Network for  ₹16 crore. The management of Nazara Technologies said that the acquisition will provide a boost to its user base and offerings in the US markets.

⭐ Gold prices shine after Fed meeting 

Gold prices regained the ₹59,000 mark per 10 gram in Indian markets. This comes after international gold prices rose over 1%. The US Fed yesterday hiked the key rate by 0.25%. Following this, the dollar dropped to a seven-week low. This is indirectly beneficial for dollar-priced commodities like gold.

In Focus

Why are markets jittery after the Fed meet?

After the US central bank announced a 0.25% rate hike, the US markets cheered the decision initially as it was in line with expectations. However, as investors continued to digest the US Fed’s commentary, the markets turned volatile and ended lower. Following in the US markets’ footsteps, the Asian markets including India also swung between gains and losses. 

Let’s understand why the Fed’s commentary and rate hike decision have made investors jittery. 

Battle against inflation

The US Fed has continued its battle against inflation by taking the key rate to 5%. And it has signalled that there could be one more rate hike this year. Along with it, Fed officials have indicated that they will cut rates next year but it could be lower than what was anticipated earlier. The median rate forecast for 2024 is now 4.3%, higher than the earlier estimate of 4.1%. All this highlights that the battle against inflation could be prolonged. 

Banking crisis 

The fight against inflation has been complicated by the unravelling of the banking crisis. The Fed said that the recent developments (the collapse of two US banks) could weigh on economic activity. Simply put, higher rates combined with the ongoing bank turmoil could impact lending and thereby hurt spending or consumption. In fact, US bank Well Fargo has highlighted financial instability as the biggest risk post the Fed’s monetary policy meeting, according to reports. 

All these factors are making investors across the world jittery. So, going ahead, they will keenly monitor how central banks strike a balance between fighting inflation and stabilising the financial system.

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Phrase of the day

Going Long

When you buy a stock, futures or an option contract with the hope that its price will rise, it is called going ‘long’.  When should you go long, find out from this chapter What does going Long mean? 

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