D-Street indices ride high on US Fed’s jumbo rate cut
bond yields retreated to a nearly 31-month low Thursday after the US central bank unexpectedly cut rates by half a percentage point overnight. But broader local gauges and export-laden technology counters fell over concerns the outsized reduction re flects hitherto unknown growth challenges in the world’s biggest economy.
“Since quantum of the cut is bigger than expectations, it implies concerns of a growth slowdown in the US economy, which led to the initial subdued reaction in markets today,” said Pankaj Pandey, head of retail research, ICICI Securities.
Wall Street Rallies
Most analysts had pencilled in a quarter percentage point reduction in the policy rate.
The Nifty advanced 0.15%, or 38.25 points, to close at 25,415.80, while the Sensex gained 0.29%, or 236.57 points, to close at 83,184.8. Nifty Midcap and Smallcap gauges lost between 0.6% and 1.2%, while the technology index retreated 0.3%, having fallen more than 1% intraday. India’s $250-billion technology industry generates more than four-fifths of its revenues in the US. More than two shares declined for every advancing stock.
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