ET NEWS

Washington: The Federal Reserve cut its key interest rate by a quarter-point Wednesday and projected it would do so twice more this year as concern grows at the central bank about the health of the nation's labour market.The move is the Fed's first cut since December and lowered its short-term rate to about 4.1%, down from 4.3%. Fed officials, led by Chair Jerome Powell, had kept their rate unchanged this year as they evaluated the impact of tariffs, tighter immigration enforcement, and other Trump administration policies on inflation and the economy.Yet the central bank's focus has shifted quickly from inflation, which remains modestly above its 2% target, to jobs, as hiring has grounded nearly to a halt in recent months and the unemployment rate has ticked higher. Lower interest rates could reduce borrowing costs for mortgages, car loans, and business loans, and boost growth and hiring."Downside risks to employment have risen," the Fed said in a statement after its two-day meeting.Fed officials also signalled that they expect to reduce their key rate twice more this year, but just once in 2026, which may disappoint Wall Street. Before the meeting, investors had projected five cuts for the rest of this year and next.Just one Fed policymaker dissented from the decision: Stephen Miran, who President Donald Trump appointed and was confirmed by the Senate in a rushed vote late Monday just hours before the meeting began. Many economists forecast additional dissents, and the outcome suggests that Powell was able to patch together a show of unity from a committee that includes Miran and two other Trump appointees from his first term, as well as a Fed governor, Lisa Cook, whom Trump is seeking to fire.The Fed is facing both a challenging economic environment and threats to its traditional independence from day-to-day politics. At the same time that hiring has weakened, inflation remains stubbornly elevated. It rose 2.9% in August from a year ago, according to the consumer price index, up from 2.7% in July and noticeably above the Fed's 2% target. Powell suggested last month that sluggish growth could keep inflation in check even if tariffs lift prices further.

Mumbai: India's stock indices held steady on Wednesday ahead of the US Federal Reserve's rate decision overnight, with investors betting on a widely expected cut, while looking for cues on the path ahead.NSE Nifty finished at 25,330, up 0.4%, or 91 points. The Sensex ended at 82,693, 0.4%, or 313 points, higher."Investors are pricing in a 25-basis point interest rate cut by the Fed, but the commentary on future cuts that follows will be more keenly watched," said Pankaj Pandey, head of retail research, ICICI Direct. "The expected 25 bps cut could drive some foreign flows into India, specifically in the BFSI and IT space."A rate cut by the American central bank could result in the weakening of the dollar, which, in the past, has led to money flowing out of the US to emerging markets, including India.The ebbing overseas fund outflows in September so far have raised hopes that the worst of the foreign selling might be over. FPIs sold shares worth a net ₹1,125 crore on Wednesday. Their domestic counterparts bought shares worth ₹2,294 crore. In September, global investors offloaded shares worth ₹3,092 crore after dumping shares worth over ₹80,000 crore in July and August.123959393"The foreign sell-off has been limited and if there is a positive trigger in the Fed commentary then Nifty can move towards a new high, said Pandey. "Nifty is expected to gain around 3-5% in the next couple of months," he said.The Volatility Index (VIX)-the market's fear gauge-hovered around lifetime lows. The measure, which hit a lifetime low of 10.12 on Friday, ended at 10.25 on Wednesday, down 0.2% as traders anticipate less risk in the near term.The Nifty Midcap 150 and the Smallcap 250 indices advanced 0.2% and 0.5% each on Wednesday. Out of the 4,328 shares traded on BSE, 2,341 advanced, 1,828 declined. In the past week, the mid-cap and small-cap indices gained 1.6% and 2.2%, respectively.Pandey said the downside is also limited, as most of the bearishness on account of tariffs and foreign selling is already discounted. "There is also an anticipation of some relief on the tariff front, with expectations of it to be reduced going ahead," said Pandey.Technical hurdlesWhile the sentiment has improved, analysts advise caution."With most of the positives priced in, Nifty is already closer to the critical hurdle of 25,500 which implies no major upmoves," said Ajit Mishra - VP Technicals, Religare Broking. "If the benchmark crosses this level decisively, it can inch closer to 26,000 levels."

Mumbai: The Securities and Exchange Board of India (Sebi) is considering widening institutional participation in the commodity derivatives market, its chief Tuhin Kanta Pandey said on Wednesday. The regulator will engage with the government to allow banks, insurers and pension funds to trade in these markets. It is also examining a proposal to allow foreign portfolio investors to trade in non-cash settled non-agricultural commodity derivative contracts, he said. "Strengthening India's commodity markets is high on Sebi's regulatory agenda," Pandey said at an event hosted by MCX. "Enhanced institutional participation will bring in higher liquidity, making the market more attractive for hedging."Currently, large corporates, traders, importers and SMEs (small and medium enterprises) actively participate in the commodities market. Institutional investors like mutual funds and alternative investment funds are increasingly recognising metals as an asset class that improves risk-adjusted returns for investors, he said. The regulator has already constituted a committee to recommend measures for deepening the agricultural commodities segment and will also form a working group for developing the non-agricultural commodity space, including metals, according to Pandey.By December, Sebi will include commodity-specific brokers in the Samuhik Prativedan Manch, a common reporting mechanism for compliance reports.

NEW DELHI: The idyllic tourist haven of Goa is experiencing a sharp correction in real estate prices and hotel room tariffs this year for the first time since its post-pandemic boom. Real estate and hospitality industry insiders say rates have fallen by nearly 15-20% this calendar year.Experts term the trend as part of a 'healthy cycle' that would create stronger foundations for future growth."We are seeing a substantial correction in rates across Goa, both in hotels and long-term rentals, with rates coming down by nearly 15-20%," said Nikhil Sharma, MD and COO (South Asia) at Radisson Hotel Group. He said the most visible drop has been in North Goa hotels, particularly in the free and independent traveller segment.The residential rental market has also witnessed a significant impact, especially in the group housing category. "Overall, this correction is healthy for the market. It ensures affordability, stimulates demand, and builds long-term stability for both villa owners and hoteliers," said Sharma.The stabilisation in villa prices in Goa should be seen as a 'healthy' sign for the market, said Aditya Kushwaha, CEO and director, Axis Ecorp.He noted that the current phase is creating more realistic entry points for buyers, especially non-resident Indians who continue to see strong lifestyle and investment value in second homes. "Villas in North Goa, for instance, saw a jump of nearly 30% since 2022, but prices have now steadied as oversupply and more cautious buyer sentiment have come into play," he said.The villa market in North Goa faced price corrections in the first half of 2025 because of oversupply, said Deepak Jain, founder of Mayfair Consultants. "In contrast, South Goa continues to maintain strong value owing to restricted supply," he added.Jain said the market was appealing over the past two to three years in terms of rental and capital values, but rentals have since plunged due to the influx of new hotels and villas.Despite the weak price trend, several property developers from across India are continuing to launch new projects in Goa. Developers term the current period as a 'cooling-off' phase due to the increased supply of new hotels and villas. However, the outlook remains optimistic as new infrastructure projects are getting launched improving connectivity across India.Amrita Gupta, director of Manglam Group said the affordability factor should act as a catalyst for fresh demand in the festive season, especially with North Goa already accounting for over 60% of residential traction."We see this as a moment of consolidation that will pave the way for sustainable growth and continued demand in Goa's second-home market," said Kushwaha, who is executing a gated villa project in Goa.

Gold prices fell nearly 1% on Wednesday, retreating from a record high scaled earlier in the session, as market participants parsed remarks from Federal Reserve Chair Jerome Powell.Spot gold was down 0.9% at $3,658.25 per ounce, as of 3:11 pm EDT (1911 GMT), after hitting a record high of $3,707.40. Prices have risen nearly 6% so far this month.U.S. gold futures for December delivery settled 0.2% lower at $3,717.8.The Fed cut interest rates by a quarter of a percentage point and indicated it will steadily lower borrowing costs for the rest of the year. Meanwhile, Powell said the Fed is in a "meeting-by-meeting situation" regarding the outlook for interest rates."The Fed is signalling uncertainty with Powell calling this a 'risk-management' cut which has triggered some quite understandable profit-taking," said Tai Wong, an independent metals trader."A retracement or at least a consolidation is healthy; I don't expect an unusually deep pullback. Unless we get below major technical support at $3,550, the short-term uptrend should remain intact," he added.This marks the Fed's first rate cut of the year, following a pause in policy changes since December after lowering interest rates three times in 2024.Gold often gains appeal when interest rates fall, as lower yields reduce the opportunity cost of holding the non-yielding asset.Analysts say gold's record run this year has been underpinned by sustained central bank purchases, diversification away from the U.S. dollar, resilient safe-haven demand amid geopolitical and trade frictions, and broad dollar weakness. Bullion, considered a hedge against uncertainties, has surged 39% so far this year.Deutsche Bank raised its gold price forecast for next year to an average of $4,000 per ounce, up from $3,700.Spot silver slipped 2.4% to $41.51 per ounce, platinum dropped 2.2% at $1,360 and palladium fell 2.6% to $1,145.44.

The US Federal Reserve has cut interest rates for the first time this year, lowering its benchmark policy rate by 25 basis points to 4%-4.25% range. The move marks the beginning of a monetary easing cycle aimed at supporting a slowing labor market, even as inflation remains elevated.Fed said for further tweaks to the interest rates, the committee will assess incoming data, evolving outlook, and the balance of risks.The central bank acknowledged that growth of economic activity moderated in the first half of the year and that job gains have slowed. However, even as it effected a reduction, Fed pointed to elevated inflation.The latest consumer price data showed inflation in August hitting a seven-month high, with food and apparel costs driving much of the increase. Despite this, policymakers opted to prioritise the job market, which has shown signs of weakness. Recent figures revealed smaller job gains and a rise in unemployment, with many companies delaying hiring amid an uncertain economic outlook.Along with the policy outcome, Fed lifted its 2025 growth forecast to 1.6% from June's 1.4% projection. However, it made no change to its unemployment and inflation forecasts.The Fed’s action breaks a pause that began in January after a string of cuts between September and December last year. Analysts say the latest move could provide fresh momentum for Wall Street, though some of the optimism may already be priced in.Market participants now expect a series of rate reductions through the rest of the year and into 2026. Some forecasts point to as many as six more 25 basis-point cuts by the end of next year, though much depends on the path of inflation and the resilience of the broader economy.The decision also comes against the backdrop of political pressure. US President Donald Trump has been vocal in urging Chair Jerome Powell to bring down rates more aggressively, accusing the Fed of holding back growth. Divisions within the central bank’s policy committee had also delayed a pivot, but today’s move indicates a clear shift in stance.Following the decision, on Wall Street, Dow Jones jumped 0.78% even as tech heavy Nasdaq was in the red.

New Delhi: The Centre on Wednesday exempted from customs duty 18 defence-related imports, including flight motion simulators, ship-launched missiles, rockets with calibres over 100 mm, remotely piloted military aircraft, and all parts, spares, tools, and accessories used for artillery weapons, rifles, aircraft, and missiles.The duty exemption will also cover military transport aircraft, deep submergence rescue vessels, unmanned underwater vessels, and high performance batteries for drones, among others, a notification issued by the Central Board of Indirect Taxes and Customs (CBIC) said. These items will now attract nil customs duty and nil integrated goods and services tax (IGST). The move will support the country's defence modernisation efforts.These changes are in line with the recent reduction of GST on these products from 18% to nil.Additionally, the government has provided relief from IGST on certain imports, including works of art for public exhibition in museums or galleries, memorials of a public character intended for public places, and antiques or antiquities, if they are certified by the culture ministry. Earlier there was exemption only on basic customs duty.