Fed Rate Genie effect on Nifty

Federal Funds Rate
Actual: 3.25%
Forecast: 3.25%
Previous: 2.50%

Jay Powell’s closing statement in Press Conference and dollar index zooms above 111.00 while riskier assets turned down after Fed’s hawkish mode.

Accordingly Fed hiked by 75 bps for a third straight time and guided for more aggressive hikes than expected

What is key to note as per latest projections by Fed members that there will no rate cut in 2023 the big hawkish shift in FOMC stance - (although projection may change due to evolving conditions).

It is now highly predictable that we may see another 75-bps hike in November.Fed hints at another 125 bps hike till December and 25 bps early next year .

US yields move higher. USDINR hovering at 80 handle on spot reference

The genie is out of the bottle. US FED increased rates by 75 basis points with hawkish stance on the immediate future of the economy. The same is expected from other countries like Japan and European Union in coming days. It is in no way an indication of selling and panic but it does indicate caution.

Nifty. SgX suggests gap down opening by 130 points but the important point is the follow up. If we fall more after opening, then it would be a bad day else we may see some recovery in the next couple of days. The most important level on the downside is 17450/430 if we are able to hold it then it's fine else we exit trading longs.

BankNifty. Bank Nifty has shown lot of strength and has strong support of 40900. It should break today and we can see 40500 today. If it breaks, we can see another 800 points gone.

Derivative. Data was neutral till yesterday but put longs were created which indicate immediate pressure.