Stock Market Today: Equity benchmark indices opened on a weaker note on Thursday following losses overnight in the US markets post US Federal Reserve’s 25 bps rate increase. The benchmarks, however, soon steadied and moved from strength-to-strength on the back of strong corporate earnings and renewed FII buying. A possible pause by the US Fed in rate hike also aided the sentiment.
The S&P BSE Sensex from a low of 61,120, rallied to a high of 61,798 backed by strong in gains in index heavyweights HDFC twins and Reliance Industries. The BSE benchmark ended 556 points stronger at calendar year’s high at 61,749.
Eight of the 13 major sectoral indexes advanced, with metals rising over 1% as a weaker dollar boosted metal prices. All 15 constituents of the metal index logged gains.
High weightage financials added 0.3%. Equipment financing company Cholamandalam Investment and Finance Company Ltd surged over 9% to a record high as earnings beat estimates.
Global Cues
US stocks ended lower on Wednesday, reversing gains after comments by Federal Reserve Chair Jerome Powell left investors wondering what the U.S. central bank’s next move would be with interest rate hikes. Indexes initially held onto gains following the Fed’s statement. It increased interest rates by a quarter of a percentage point, as expected, and signaled it could pause further hikes.
Global stock markets sagged while the Japanese yen rose on Thursday in reaction to the Fed’s policy statement and signs of stress at another U.S. regional bank, spurring investors to price in a pivot rather than just a pause in rate rises.
Santosh Meena, Head of Research, Swastika Investmart, said: “The US Fed hiked interest rates by 25 basis points, in line with expectations. However, Jerrom Powell’s commentary was a little confusing because he hinted at a pause but gave no sign of a rate cut in the future. He was not much concerned about the recession, while on the other hand, regional banks are facing strong selling pressure. The US market reacted negatively to it, but there is a sharp fall in crude oil prices, US bond yields, and the dollar index, which are positive for emerging markets. Technically, 18181–18230 is a critical supply zone for the Nifty, where we can expect some pullback, but bulls will remain in the driver’s seat till the Nifty holds the 17770 level.”
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