Market close highlights: Foreign institutional investors (FIIs) sold shares worth ₹5,656.26 crore on June 5, while domestic institutional investors bought shares worth ₹4,555.08 crore.
Market close highlights: World stock markets hit all-time highs and the euro rallied on Thursday, ahead of what was widely expected to be the European Central Bank’s first interest rate cut in nearly five years.
With the long-awaited moment approaching, traders pushed the pan-European STOXX 600 up 0.3% in early deals and saw the MSCI 47-country main world index inching closer to a new peak.
Sentiment was almost in mania phase again. Wall Street’s S&P 500 and Nasdaq both hit new records on Wednesday after now-$3 trillion AI giant Nvidia overtook Apple to become the world’s second most valuable company after Microsoft.
The euro also rebounded. It added 0.1% to last month’s 2% rise and neared $1.0880, though most traders were sitting on their hands, waiting to see what the ECB would signal later.
All 82 economists surveyed by Reuters expect the Frankfurt-based central bank to cut its key rate to 3.75% from the record high 4.0% level it has held since September, but what it will do after that is the subject of much debate.
EU elections are due in the coming days, but stronger-than-expected data in the past few weeks has raised doubts about how much further cuts are appropriate this year.
Euro zone inflation rose more than expected in May, driven by price increases in the services sector, which some policymakers see as particularly relevant because it reflects domestic demand.
This reflects a stronger-than-expected rise in wages in the first quarter of the year, which boosted consumers’ poor disposable income after years of wage growth below inflation.
For this meeting, though, it was hard to remember any move from the central bank marking this well in advance, said Michael Metcalfe, head of global macro strategy at State Street Global Markets.
“Today is probably going to be a bit of a deciding factor, because they (the ECB) will be less clear on their forward guidance,” Metcalfe said. “That’s a very tough question for markets and the ECB to assess now, given recent strong data.” “It could be a classic buy-rumor-sell-fact and the euro could get some support from here.” On Wednesday, the Bank of Canada beat the ECB to become the first G7 country to cut rates this cycle. The U.S. Federal Reserve is due to meet next week, though it’s not expected to change rates until September. In contrast, the Bank of Japan, which meets next week, will debate whether and when to raise rates. The Canadian dollar pared some losses from Thursday’s post-cut decline to leave it at C$1.3679 to the U.S. dollar. In bond markets, Germany’s 2-year government bond yield, which is sensitive to policy rate expectations, was down 0.5 basis points at 2.98%. It hit 3.125% on Friday, its highest level since mid-November.
The benchmark 10-year U.S. Treasury yield was near its lowest level in two months, after data this week indicated the U.S. labor market is finally cooling.
This included a drop in private U.S. payrolls on Wednesday and a report on Tuesday that showed job openings in April fell to the lowest in more than three years.
Markets are now evaluating nearly two full 25 basis point Fed rate cuts again this year, with a September rate seen as a 68% probability compared with last week’s 47.5%.
“We’re still in the Goldilocks range, so bad economic news has been good for equities as Fed rate cuts are back in the news,” said Ben Bennett, Asia-Pacific investment strategist at Legal & General Investment Management. Investors’ attention will soon turn to the U.S. non-farm payrolls report for May due on Friday, which a Reuters poll of economists expects to show an increase of 185,000 jobs.
“We need to keep it around 100-150k to maintain the Goldilocks narrative,” Bennett said. “Much higher than that and yields could rise again, but if we go to zero or negative, we could be talking about a hard landing again.”
In commodities, Brent crude futures rose 0.48% to $78.79 a barrel, while U.S. West Texas Intermediate crude futures rose 0.63% to $74.54.
Spot gold rose 0.59% to $2,369 per ounce, while silver rose 1.34% to $30.41 per ounce after rising 1% earlier.
06 Jun 2024, 03:16:07 PM IST
Sensex Today Live: Sector Index Heat Map
Sensex Today Live: Except FMCG, Pharma, Health and Private Bank, all other sectoral indices were trading in the green.
Realty index registered the highest gain, followed by Media, PSU Bank and Oil & Gas indices.
Other heavyweight indices such as Auto, Bank, Financial Services and IT also led with gains ranging from 0.4% to over 2%.
