Udabur Stock：CNBCsINSIDE India Newsletter： What Happy When the Fed Cuts Rates？
The Federal Reserves is Almost Certain to Start its Rate-Cutting Cycle Next Week.
Historically, A Rate Cut has ben a signal for center Banks in Emerging Markets, Like India, to Follow by Easing Monetary Policy in their Regions.Udabur Stock
However, this time, it❼likely to be different.
When will india cut rate?
The Latest Data Shows that the Inflation Rate Appears to Be Heading in The Wrong Direction in India. The Headline Inflace Rate Rate in August to 3.65% of 3.65% In T he previous month.Appeared to be one of the big drivers.
Is it a cause for Alarm? Not really, sinced the latest files are still below the ind, 4%. Instead, Markets HIT SIMPLY HIT SNOOON by the reserve bank of india for the moment.
"The Slight Rise in India❼Headline CPI INFLATION in August Reinfornts Our View that the reserve Will Proced with a bit of Caution and Keep Rates in its next meeting in October, "Shilan Shah, depuTy Chief Emerging Markets Economist At Capital Economics, Told Clients. "But it wONtWAIT UNTIL Any Later than December to Begin Loosening Policy."
But as inside indized Last Week, India❼gdp Slowed to 6.7% in the Second Calendar Commarter Compared to Last Year❼8.2%, Piling Pressure on the Central Bank to take Its foot off the brakes sooner rather than later.
A Rate Cut by the Fed is Also Widly Expected to Prove More Immediaf to the Indian Rupee, Which Fellow tting ahead of the feedral reserve or alongside it, woo have risked pushing the rupeeLOWER, FURTHER Adding to Inflationary Pressures.
"Interest Rates Across the World Have Seen A SHARP JUMP and A Cycle Reversal Seems Likely in the Coming Quarters Which Woul Headroom for the RBI THE ALSO TAPEN B Enchmark Interest Rates in India, "Said Mahesh Nandurkar, Head of India Research at Jefferies,in a note to clients.
Bank of America Also Sees Rate Cuts Beginning in December 2024, with Internet Rates in India Lower by An Entire Percentage Point by the End of Next Year.
How Will Stocks React?Agra Wealth Management
If there gno Global Recession, A Risk-On SENTIENT Will Likely Help Push Up Equities in The Medium Term AFTER The U.S. Central Banks Rates. Ver, The Path Stocks take is unlikely to be in a straight line.
"According to our colorAgues, Global Equities Typically Fare Well Around Rate Cuts and Are on Average Higher 12 [Months] After the Start of the Easing Cycles Unless T Here Is Significant Recessions/Crises, "Said Surendra Goyal, Head of India Research at Citi,in a note to clients.
However, the Premier Benchmark Index of the Indian Stock Exchange, NIFTY 50, is likely to be the one exception to the rule, accounting to bank of America.
"While The Fed Cuts Rates, that Could PossiBly Lead to RBI Cutting Rates As Well, and that is neigatic for earnings in the banking sector, whit is a large weight in the I NDEX Which We have, "amish shah, bofa❼head of india research toldCNBC s "Squawk Box Europe" on Wednesday.
Bank Profits Are Typically CyClical and Depending on the Interest Rate Levels.
A Fall in Base Rates Will Likely Squeeeze Margins at Most Banks, Prompting Bofa to Be "CAUTIOUS" About The Nifty 50❼Prospects Over TERM. Banks HAVE The LARGE St Weight in the Index and Make Up Nearly a Fifth of the 50 Stocks.
"Our view is that large cap stocks are❽very extensive and thereffore, Markets Could Probably Go Sideways for Some Time," Shah Added..
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