US Fed boosts Indian markets in first half, domestic factors later dominate

Sarkaritel
By Sarkaritel March 20, 2015 12:28

US Fed boosts Indian markets in first half, domestic factors later dominate


20us_fedMumbai, March 20  A day after the US Federal Reserve gave indications of its monetary policy course, a benchmark index of Indian equities markets, the 30-scrip BSE Sensitive Index (Sensex), closed Thursday’s trade down 152.45 points or 0.53 percent – after rallying over 300 points in the day’s trade.

Analysts said this was from domestic factors predominating later in the day’s trading showing up the lesser importance of the US Fed factor.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day’s trade in the red. It was down 51.25 points or 0.59 percent down at 8,634.65 points.

The US central bank on Wednesday dropped an assurance to be “patient” in raising interest rates and signalled the hike could come by mid-year.

In a statement issued after a two-day meeting of its policy-making committee, the Federal Reserve also emphasised that it might still delay the decision to raise the rates for the first time since the 2008 financial crisis, until later this year.

The Sensex touched a high of 28,978.74 points and a low of 28,411.70 points in intra-day trade.

“Today (Thursday) in the first half everyone – developed, emerging markets, including India, benefited. But after that we domestic factors dominated showing up the lower importance of the US Fed factor,” Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services told.

“For instance, Friday is the last day before parliament recess for a month, while bills like the land and coal mines are pending,” Nair added.

“Markets opened higher on the back of strong US markets. The Fed’s announcement on not hiking rates in April and keeping future hikes data dependent, buoyed sentiment,” Dipen Shah, head of PCG (Private Client Group) Research, Kotak Securities.

“Increase in interest rates in US can have an impact on the Indian currency as well as stock markets as funds may flow out of India or additional funds may not come into India. We believe that, going ahead, fiscal reforms by the government will be the triggers for the markets to sustain and move higher from current levels,” Shah added.

“Market is expecting a rate hike post June 2015, hence indication towards the time-frame and outlook will provide support to the world market,” Nair said.

Sarkaritel
By Sarkaritel March 20, 2015 12:28