Sensex scales record highs, Nifty closes at all-time high as Fed minutes indicate slower pace of rate hikes

Hopes of slower US rate hikes and cooling crude costs cheered Indian shares, with the benchmark indices closing at record highs on Thursday. All sectoral indices gained, and the Sensex and the Nifty rose 1.24% and 1.19%, respectively, to shut at all-time highs of 62,272.68 and 18,484.10. During the day, the Sensex hit a brand new high of 62,412.33, whereas the Nifty was only a few factors away from its record high of 18,604.45.

Minutes of the US Federal Reserve’s final assembly confirmed that the majority officers remained in favour of going gradual on curiosity rate hikes, lifting inventory market sentiments worldwide.

Up, up and away

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Up, up and away

Financial companies shares and some public sector banks hit new 52-week highs on Thursday. In addition, value-buying was seen in IT shares on the again of enticing valuations and a rally within the Nasdaq index, analysts mentioned.

“Investors wound up quick positions on the expiry date, triggered by US Fed minutes indicating a average pace of rate hikes going forward that finally propelled benchmark indices Sensex and Nifty to new all-time highs,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities Ltd. The falling US Dollar index and bond yields also improved risk appetite and led to broad-based buying, analysts said.

The yield on the 10-year US treasury bond fell to 3.69%, and the dollar index slipped to 106. According to V.K. Vijayakumar, chief investment strategist, Geojit Financial Services, so long as this trend continues, bears will be on the back foot. In India, macro news confirms the economy is resilient, and investment is gaining momentum, Vijaykumar said, adding latest RBI data show credit growth at an impressive 17% year-on-year, which is good for banking and capital goods stocks.

Meanwhile, crude prices softened as Group of Seven (G7) nations pressed for a price cap on Russian oil and as crude oil inventories in the US rose above analysts’ expectations. Brent at $84-85 a barrel has slipped to 10-month lows, levels not seen since early January.

Anindya Banerjee, vice-president of currency derivatives and interest rate derivatives at Kotak Securities Ltd, said the rupee had been an underperformer in the past fortnight, primarily on account of demand for dollars from oil marketing firms and some bids from foreign portfolio investors. However, on Thursday, the rupee closed 21 paise stronger at 81.63, as traders sold dollars after the release of US Fed minutes. The weak dollar and strong risk sentiments can continue to push the rupee towards 81.25/30 to a greenback stage, added Banerjee, who expects an general vary of 81.25-81.85 in spot markets.

Foreign portfolio buyers have been web patrons of 1,231.98 crore value of equities on Thursday, provisional information indicated. FPIs have remained web patrons of equities in November.

Global markets rallied on the rate reduction, falling US volatility index, and the autumn within the Dollar Index and US Treasury yields, mentioned Siddhartha Khemka, head of retail analysis at Motilal Oswal Financial Services Ltd. Once the Nifty is ready to cross 18,604, Khemka expects the index to inch up in the direction of 19,000 ranges.

Markets have reclaimed buoyancy, and the tone is predicted to proceed, mentioned Ajit Mishra, vice-president of technical analysis, Religare Broking Ltd. He, nonetheless, added contributors shouldn’t go overboard and proceed with selective shopping for.

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