US Markets Decline as Hopes for Fed Rate Cuts are Delayed, S&P 500 Down 1%; GIFT Nifty Falls

The US markets experienced a decline as expectations for Federal Reserve rate cuts were postponed, primarily due to higher-than-expected Consumer Price Index (CPI) data for March. This unexpected rise in CPI, with a 0.4 percent month-over-month increase and a year-over-year figure of 3.5 percent compared to February’s 3.2 percent, dashed hopes for rate cuts in June. Consequently, investor sentiment was dampened, leading to a downturn in the indices.

The S&P 500 suffered a 1 percent drop to 5,157.85, while the Nasdaq Composite also declined by 1.03 percent to 16,133.90. Similarly, the Dow Jones Industrial Average fell by 1.20 percent to 38,418.40.

Amidst the market downturn, bond prices surged, reflecting the shift in investor expectations regarding monetary policy.

The GIFT Nifty, influenced by global market pressures, experienced a decline of 0.72 percent, closing at 22,636.50.

In contrast, European markets managed to edge higher despite the concerning US CPI inflation data. The FTSE rose by 0.28 percent to 7,956.98, while the DAX saw a 0.10 percent increase, reaching 18,094.06. However, the CAC experienced a slight decline of 0.08 percent, closing at 8,042.90.

Earlier in the day, the Nikkei in Japan fell by 0.48 percent to 39,581.81, while the Hang Seng in Hong Kong saw a notable increase of 1.85 percent, reaching 17,139.17.

Indian indices had reached new highs prior to the release of US CPI data. The Nifty closed 0.49 percent higher at 22,753.80, and the Sensex was up by 0.47 percent, ending at 75,038.15.

On the investment front, Domestic Institutional Investors (DIIs) made net purchases amounting to Rs 163.36 crores, while Foreign Institutional Investors (FIIs/FPIs) net purchased Rs 2,778.17 crores.

In the crude oil market, prices exhibited mixed performance on Wednesday. While WTI experienced a marginal decline to 85.19, Brent crude traded 0.02 percent higher, reaching 89.44.

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