Sensex, Nifty pull back from record highs, trade flat; FMCG, FS, IT drag

Indian benchmark equity indices BSE Sensex and Nifty 50 pulled back from the record highs they touched early on, on Monday, and were trading muted.

At 12 PM, the BSE Sensex was down 10 points, or 0.01 per cent, at 82,880, while the Nifty 50 was at 25,358, up 2 points, or 0.1 per cent.

Meanwhile, Asian stocks in other markets made a cautious start on Monday in a week that is almost certain to see the start of an easing cycle in the US with the only question being the size of the cut, with markets split on the chance of an outsized move.

Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes US retail sales and industrial production.

Holidays in China, Japan, South Korea and Indonesia made for thin conditions and early moves were modest. MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat, after bouncing 0.8 per cent last week.

Japan’s Nikkei was shut but futures traded at 36,490 compared to a cash close of 36,581 as recent yen gains pressured exporters. S&P 500 futures and Nasdaq futures were both a fraction firmer.

Economic data from China over the weekend disappointed as industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further.

Meanwhile, futures imply a 52 per cent chance the Federal Reserve would cut rates by 50 basis points on Wednesday with the odds narrowing sharply after media reports revived the prospect of a more aggressive easing.

If the Fed does go by half a point, JPMorgan economist Michael Feroli expects policy makers to also project 100 basis points of cuts this year and 150 basis points for 2025.

The market has 114 basis points of easing priced in by Christmas and another 142 basis points for next year.

Just the chance of an aggressive move saw bonds rally broadly, with two-year Treasury yields down at 3.593 per cent having scored the lowest close since September 2022.

The Bank of England is generally expected to leave rates on hold at 5.00 per cent when it meets on Thursday, though markets have priced in a 31 per cent chance of another cut.

The Bank of Japan meets on Friday and is widely expected to hold steady, though it may lay the groundwork for a further tightening in October.

South Africa’s central bank is also tipped to ease policy this week, while Norway is seen holding steady.

Lower bond yields underpinned gold, which stood at $2,579 an ounce and near an all-time peak of $2,585.99.

Oil prices edged up as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Brent rose 19 cents to $71.78 a barrel, while US crude firmed 28 cents to $68.93 per barrel.
Indian benchmark equity indices BSE Sensex and Nifty 50 pulled back from the record highs they touched early on, on Monday, and were trading muted.

At 12 PM, the BSE Sensex was down 10 points, or 0.01 per cent, at 82,880, while the Nifty 50 was at 25,358, up 2 points, or 0.1 per cent.

Meanwhile, Asian stocks in other markets made a cautious start on Monday in a week that is almost certain to see the start of an easing cycle in the US with the only question being the size of the cut, with markets split on the chance of an outsized move.

Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes US retail sales and industrial production.

Holidays in China, Japan, South Korea and Indonesia made for thin conditions and early moves were modest. MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat, after bouncing 0.8 per cent last week.

Japan’s Nikkei was shut but futures traded at 36,490 compared to a cash close of 36,581 as recent yen gains pressured exporters. S&P 500 futures and Nasdaq futures were both a fraction firmer.

Economic data from China over the weekend disappointed as industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further.

Meanwhile, futures imply a 52 per cent chance the Federal Reserve would cut rates by 50 basis points on Wednesday with the odds narrowing sharply after media reports revived the prospect of a more aggressive easing.

If the Fed does go by half a point, JPMorgan economist Michael Feroli expects policy makers to also project 100 basis points of cuts this year and 150 basis points for 2025.

The market has 114 basis points of easing priced in by Christmas and another 142 basis points for next year.

Just the chance of an aggressive move saw bonds rally broadly, with two-year Treasury yields down at 3.593 per cent having scored the lowest close since September 2022.

The Bank of England is generally expected to leave rates on hold at 5.00 per cent when it meets on Thursday, though markets have priced in a 31 per cent chance of another cut.

The Bank of Japan meets on Friday and is widely expected to hold steady, though it may lay the groundwork for a further tightening in October.

South Africa’s central bank is also tipped to ease policy this week, while Norway is seen holding steady.

Lower bond yields underpinned gold, which stood at $2,579 an ounce and near an all-time peak of $2,585.99.

Oil prices edged up as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Brent rose 19 cents to $71.78 a barrel, while US crude firmed 28 cents to $68.93 per barrel.