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Nifty flat after hitting 7800, Sensex up on Fed rate hike


TheNewsInternational Team

9:55 am Market check:

The Sensex is up 68.11 points or 0.3 percent at 25562.48, and the Nifty is up 20 points or 0.3 percent at 7770.90. About 1386 shares have advanced, 420 shares declined, and 96 shares are unchanged. 

SBI, Tata Steel, GAIL, Hindalco and Vedanta are top gainers while ONGC, M&M, HDFC, Infosys and Maruti are losers.

9:45 am GST logjam: 
In a fresh bid to break the logjam on the crucial GST Bill, the government is contemplating holding an all-party meeting soon as it is confident of the support of a larger number of Opposition parties on the issue. There is a view within the government that Congress is “single-handedly” blocking the passage of the GST Bill for “other reasons” and may not find support of many parties on this issue on a common forum. Government sources said that a senior leader from the opposition camp had also suggested convening of an all-party meeting to break the logjam over the issue.

9:30 am Market outlook:
Market expert Samir Arora of Helios Capital says one shouldn’t worry far too much about the Fed hike, despite worries of capital moving from emerging market (EMs) to Developed Markets (DMs) to attract higher rates. Arora says this shift of funds is unlikely to actually happen, further adding that even if one does go by historic data 17 consecutive Fed hikes augured well for India, so that scenario could still pan out in India’s favour. The US Fed between 2004 and 2006 raised interest rates 17 times from — 1 percent to in June 2004 to 5.25 in June 2006. This coincided with a period of high growth in Indian economy alongwith relatively low interest rate regime.

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Boosted by strong global cues, the market has opened strong after Federal Reserve has hiked interest rates after nine years. The Nifty is up 45.40 points or 0.6 percent at 7796.30 and the Sensex is up 150.63 points or 0.6 percent at 25645. The 50-share index touched 7800 in early trade. About 822 shares have advanced, 139 shares declined, and 31 shares are unchanged.

GAIL, SBI, NTPC, Sun Pharma and Vedanta are top gainers while ONGC, M&M, Coal India, HDFC and HUL are major losers in the Sensex.

The US Federal Reserve hiked its benchmark interest rate by 0.25 percent for the first time in a decade. The move, closely watched, across the globe is seen as a dovish commentary by Fed chairperson Janet Yellen.

Yellen said the Fed’s monetary policy remains “accommodative” and there will be a “gradual” increase in Fed fund rates.

The Indian rupee has opened at 1-week high due to weakness in dollar. The currency rose 11 paise to 66.62 a dollar compared to 66.73 per dollar in previous session.

Mohan Shenoi, Kotak Mahindra Bank says with the uncertainty gone, EM equities and currencies are expected to rally today. He expects the USD-INR pair to trade today in a range of Rs 66.35-66.70/USD.

On bond market, Shenoi says the bond market is expected to rally on the back of rupee appreciation and absence of scheduled auctions in the rest of December. He expects the 10-year benchmark yield to trade today in a range of 7.68-7.73 percent.

Asian stock markets jumped as investors chose to take an historic hike in US interest rates as a mark of confidence in the world’s largest economy, though the good cheer did not extend to oil where oversupply again pressured prices.

Crude futures rose recouping some of the losses from the previous session. Crude futures rose recouping some of the losses from the previous session.

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