The News International Team
09:40am FII View: Bharat Iyer, JPMorgan says expectations are converging towards Fed rate normalisation ahead. “Our house view is for 25 basis points rate hike in the June meeting. Consensus expects rate hikes to start in September,” he adds.
According to him, at the macro level, India’s vulnerability to Fed tightening has diminished. “The current account deficit has reduced meaningfully. Improved inflation outlook has led to substantial capital flows, taking FX reserves at USD 310 billion to historic highs,” he explained.
09:15am Market Check
The market opened sharply lower on Thursday with the Nifty breaking 8500 ahead of expiry of March derivative contracts. The Sensex lost 211.54 points to 27900.29 and the Nifty declined 55.85 points to 8474.95.
About 172 shares have advanced, 307 shares declined, and 103 shares are unchanged on the BSE.
Shares of HDFC, ICICI Bank, Tata Motors, Dr Reddy’s Labs, Wipro, Coal India and Sesa Sterlite fell 1-2 percent. Infosys and HDFC Bank declined 0.9 percent each. However, Bharti Airtel and GAIL gained 1.4 percent each.
The Indian rupee slipped in the early trade on Thursday. It has opened lower by 22 paise at 62.55 per dollar versus 62.33 Wednesday.
The US dollar slipped against major world currencies on weak economic data in the US but still held onto gains of more than 7 percent year-to-date.
Mohan Shenoi of Kotak Mahindra Bank said, “Markets are expecting a delayed start of the Fed rate hike cycle. This has stalled dollar rally against major currencies.”
He further added, “Rupee has also gained against the dollar in the last one week. The rupee is expected to trade in a range of 62.20-62.50/dollar today.”
In the US stocks plunged, closing more than 1 percent lower as investors weighed the impact of the strong dollar on the economy and the coming earnings season.
On the data front in the US, February’s durable goods orders posted a decline, rather than the modest expected increase, under pressure from the strong dollar and weak global demand.
Asian markets were mixed with the Shanghai, Hang Seng and Straits Times trading higher while Nikkei dropped 1.5 percent. Kospi and Taiwan lost over 0.5 percent.