Stock Market Update:
On Friday, Stock Market bounced from losses to gains, capping a tumultuous trading week. Another hot inflation data didn’t deter investors from stockpiling, as December inflation was not quick enough to persuade investors that perhaps the Federal Reserve will raise interest rates sooner than expected.
Among the equities that hit 52-week lows today were IndiaMART, CarTrade Tech, Uniinfo Telecom Serv, Hind Nat Glass, and Dynamic Services & Security Ltd., among others.
The NSE Nifty concluded the day 167.8 points lower at 17110.15, while the BSE Sensex ended the day 581.21 points worse at 57276.94.
On the other hand, Mahalaxmi Rub, Atal Realtech, TV18 Broadcast, Ambica Agarbathies & Aroma Industries Ltd., and Gujarat Ambuja stocks all reached new 52-week highs today.
Axis Bank, SBI, Maruti Suzuki, Cipla, and Kotak Bank is amongst the top gainers on the NSE today in the Nifty 50 index.
The Dow Jones Industrial Average increased by 565 points or 1.7%. The S&P 500 increased by 2.4 percent, while the Nasdaq Composite rose by 3.1 percent. Earlier in the day, the indices had been down more than 1%.
It had been an eventful week. The S&P 500 concluded the week with a 0.8 percent gain, although the index bounced almost 5% from a weekly low of 4,222 points to 4,432 points on Friday afternoon throughout the five-day period. Only 15 times in the last five years has such a swing occurred.
The newest figure for the household consumption expenditure index was released on Friday, and it grew 5.8% year-over-year, up from the prior estimate of 5.7 percent.
The core rate, which excludes the more unpredictable food and energy costs, increased to 4.9 percent, which was also bit higher than the 4.8 percent forecast.
That means there’s a somewhat better chance than the current consensus that the Fed would raise the benchmark lending rate more than four times.
On the other hand, the stock market has already reflected a bleak economic picture. The S & P 500 is still over 8% below its all-time high set in early January, and it had already entered correction territory.
The index has still been trading well below the 200-day moving average by a smidgeon.
While this indicates that investors have misplaced some faith in the market’s overall upward trend, it also implies that some market players will begin buying additional equities if the outlook does not worsen from here.
Others feel that equities have already reacted to hints that the Federal Reserve may increase interest rates more aggressively. The Federal Reserve typically adjusts the benchmark lending rate by 25 basis points.
The two years Treasury yield hit a fresh post-pandemic high of 1.23 percent. Since February 2020, it hadn’t been that high.
The growing yield indicates bond investors’ expectations of several Fed interest rate rises in the coming years as the central bank attempts to battle excessive inflation.
The yield has dropped to 1.18 percent. The ten-year Treasury yield rose to 1.84 percent on Friday before falling to 1.79 percent at Thursday’s closing.
In a statement released on Wednesday, the Fed stated that it is poised to raise rates soon, with markets anticipating four rises this year.
But it’s still unclear if the Fed will raise rates more than four times, and markets are fearful that perhaps the Fed will raise interest rates sufficiently to stifle economic development.
Because of Apple’s better-than-expected results, the Nasdaq outpaced the other two leading indices on Friday.
The shares of Apple (ticker: AAPL) concluded the day up 7%. Nasdaq’s movements are influenced by the market capitalizations of its constituents, and Apple has a huge market cap.