Equity markets and gold prices soared following the announcement from US Fed Chairman Jerome Powell signaling three anticipated interest rate cuts throughout the year, commencing in June.
Thursday saw key benchmarks, Sensex and Nifty, kickstart on a positive trajectory, experiencing a notable surge of over one percent each.
With a remarkable climb of 540 points, or 0.75 percent, the Sensex reached 72,641, while the Nifty 50 closed the day with a substantial gain of 173 points, settling at 22,012.
Amidst robust bullish sentiments, only four stocks in the Sensex and ten stocks in the Nifty closed in the negative territory.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, highlighted that the US Fed’s indication of potential three rate cuts this year sparked a relief rally in global equity markets, consequently uplifting sentiments particularly in mid- and small-cap stocks.
Gold prices surged, with an increase of ₹1,225 per 10 grams to reach ₹66,914 per 10 grams in the spot market, despite a weak overall demand trend.
The yellow metal commenced strongly at ₹66,984 compared to yesterday’s closing of ₹65,689 per 10 grams. In the futures market, gold for April delivery soared to a new peak of ₹66,943 after gaining ₹1,193 per 10 grams.
Jateen Trivedi, VP Research Analyst at LKP Securities, noted that gold achieved an unprecedented high, propelled by the dovish remarks from the Fed Chair. The emphasis was on managing inflation without compromising economic stability, even amidst ongoing geopolitical challenges.
Government securities (G-Secs) witnessed a notable softening in yields, in line with the decline in US Treasury yields. The yield of the widely traded 10-year benchmark G-Sec (coupon rate: 7.18 percent) dropped by about 4 basis points to settle at 7.0477 percent (compared to the previous close of 7.0918 percent). This resulted in a 30 paise increase in the price of this paper, closing at ₹100.8875 (compared to the previous close of ₹100.5875).
The rupee concluded the day nearly unchanged at 83.1475 against the US dollar, compared to the previous close of 83.1575.