Amidst a backdrop of global market uncertainty, the Sensex struggled to gain momentum today as stocks faced declines following a record-breaking session on Wall Street. The pause in a rally in China and slipping Japanese shares amidst rate-hike speculations contributed to the challenging market conditions.
In mainland China, shares dipped, impacted by Country Garden Holdings Co.’s missed bond payment, which had a negative impact on developers. Additionally, the Hang Seng China Enterprises Index retreated from its recent surge. Meanwhile, US and European equity contracts remained relatively stable amidst the market turbulence.
Japanese equities saw declines as Toyota Motor Corp. and other companies agreed to pay increases, suggesting a potential sustainable wage-price cycle that could support the Bank of Japan’s hawkish shift. The yen experienced fluctuations in response to these developments.
Despite higher-than-expected US inflation, traders maintained their bets on Federal Reserve rate cuts for the year. This relative calm in response to strong inflation figures stood out, given the typical market volatility seen on CPI release days since March 2022.
The upcoming Federal Reserve meeting on March 19-20 is expected to maintain interest rates unchanged for the fifth consecutive meeting. Investors will closely monitor the Federal Open Market Committee’s quarterly forecasts for rates, particularly for any adjustments based on fresh employment and inflation data.
In other market movements, oil prices rose after four consecutive days of losses, driven by an industry report indicating a decrease in US crude stockpiles, offsetting uncertainties surrounding OPEC cuts. Gold prices held steady after recent declines, breaking a streak of record-breaking gains following the higher-than-expected US inflation figures.