US markets decline as unexpectedly strong PMI data raises concerns; GIFT Nifty down

The US markets fell on April 1 after displaying their best performance since 2019 over the past week. This decline came as stronger-than-expected manufacturing data weighed in on fears that there will be no rush in the Federal Reserve’s rate cuts for the year.

The manufacturing data showed the Purchasing Manager’s Index (PMI) unexpectedly increased to 50.3 last month, expanding for the first time since September 2022. This came despite increasing input costs and subdued employment.

CNBC TV18 reported that ‘investors remain cautious about the pace of Federal Reserve’s rate-cutting timeline this year and how soon the central bankers will be able to meet their 2 percent inflation target’.

At 9:00 pm, the S&P 500 declined 0.33 percent to 5,236.89 and the Nasdaq Composite traded flat-to-negative at 16,362.91. The Dow Jones Industrial Average was down 0.63 percent at 39,556.89.

The GIFT Nifty also traded 0.39 percent lower at 22,519.50 despite Indian indices having reached record highs earlier during the day.

The European markets remained closed on April 1 on account of Easter.

Earlier during the day, the Nikkei declined 1.40 percent to 39,803.09, thus slipping below the 40,000 mark.

The Indian indices started the new quarter riding on all-time highs as strong growth projections for the economy and expectations of rate cuts fuelled bullish investor sentiment. The Nifty ended 0.61 percent higher at 22,462.00 and the Sensex was up 0.49 percent at 74,014.55. Both the indices set new record highs of 22,529.95 and 74,254.62 during intraday trade.

On Saturday, Indian Finance Minister, Nirmala Sitharaman stated that ‘India’s Gross Domestic Product (GDP) is on its track to grow by 8 percent or more in Q4’. ‘The economy is expected to show the same rate of year-on-year expansion for the 2023-24 financial year’; she added.

On April 1, DIIs net purchased Rs 1208.42 crores while the FIIs/FPIs net sold Rs 522.30 crores.

Crude too started the new quarter on a positive note, up 1.21 percent at 84.18. Brent traded 0.83 percent higher at 87.72.