2 hrs ago
Indian Stocks Mixed as Fed Hike, NSE IPO Shape Trading
Indian share prices moved only a little because investors were unsure about the outlook.
One market report showed the Sensex and Nifty falling shortly after opening, while another showed them rising later in early trading.
This difference may reflect different times during a changing session.
The US central bank raised interest rates by 25 basis points.
It also suggested that another increase could happen this year.
Higher US rates can make the dollar stronger and may reduce foreign investment in India.
India’s rupee slipped past 96 to the dollar, while oil stayed expensive despite a small decline in prices.
Investors were also watching the large IPO from the National Stock Exchange, which could attract money that might otherwise be used to buy existing shares.
Sensex and Nifty showed mixed early moves, with one report recording declines at 9:15 a.m. and another reporting gains in early trade.
The US Federal Reserve raised interest rates by 25 basis points to 3.75%-4%, its first hike in more than three years.
The National Stock Exchange’s Rs 22,569-crore IPO opened for subscription, potentially drawing funds away from secondary-market trading.
Foreign institutional investors sold equities worth Rs 2,032.61 crore on Wednesday, adding pressure to Indian markets and the rupee.
Brent crude eased slightly but remained elevated, while the rupee weakened past 96 to the US dollar amid oil prices, foreign outflows and higher US yields.
- Who
- Indian investors, foreign institutional investors, the US Federal Reserve and the National Stock Exchange are central to the report.
- What
- Indian benchmark stocks traded with limited and conflicting early moves after a US rate hike, while the NSE’s Rs 22,569-crore IPO opened for subscription and the rupee weakened past 96 per US dollar.
- Where
- Indian equity and currency markets, with global influences from the United States, Asian markets and international oil markets.
- When
- Thursday morning, following the US Federal Reserve’s overnight decision and Wednesday’s foreign-investor selling.
- Why
- Higher US interest rates, expectations of further tightening, elevated crude prices, foreign fund outflows and the NSE IPO shaped investor sentiment.
Factors Supporting Markets
Factors Pressuring Markets
Crude oil prices
Factors Supporting Markets
A slight pullback in Brent crude, including a report of prices around $104.7-$105.7 per barrel, offered some relief to investors.
Factors Pressuring Markets
Brent remained elevated near $107.51 in broader futures trade, while geopolitical tensions and possible Red Sea supply disruptions sustained concern.
US interest rates
Factors Supporting Markets
The rate hike and expectations for further tightening were already reflected in some market positioning, while domestic equities remained relatively resilient.
Factors Pressuring Markets
Higher US borrowing costs could strengthen the dollar, pressure the rupee, reduce foreign investment flows and weaken demand for Indian technology services.
Early market direction
Factors Supporting Markets
One report showed the Sensex and Nifty gaining in early trade, helped partly by the modest decline in crude prices.
Factors Pressuring Markets
Another snapshot recorded both indices lower at 9:15 a.m.; foreign selling, muted Asian markets and the NSE IPO were cited as constraints on gains.
Key facts
- Fed decision
- The US Federal Reserve raised its policy rate by 25 basis points to 3.75%-4%.
- Sensex snapshot
- One report said the Sensex fell 0.21% to 74,182.62 at 9:15 a.m.; another reported a 172.70-point early gain to 74,509.15.
- Nifty snapshot
- One report said the Nifty 50 fell 0.1% to 23,195.25 at 9:15 a.m.; another reported an 82.50-point early gain to 23,300.10.
- NSE IPO
- The National Stock Exchange’s IPO opened for subscription at an indicated size of Rs 22,569 crore.
- Foreign selling
- Foreign institutional investors sold Rs 2,032.61 crore of equities on Wednesday.
- Rupee
- The rupee weakened past 96 per US dollar, compared with Wednesday’s close of 95.96.
- Brent crude
- Brent crude was reported between about $104.7 and $107.51 per barrel after easing slightly.
Quotes
Hariselvan Radhakrishnan
Founder and CEO of HST Wealth, a research analyst firm
“While a pullback in Brent crude to around $104.7 a barrel from its recent high offers some marginal relief, the Federal Reserve's rate hike and indication of further tightening could keep markets volatile and limit any immediate recovery.”
rediff.com
“The Fed raised its policy rate by 25 basis points to 3.75-4 per cent, its first increase in three years, and projected another hike this year.”
rediff.com
Sources
Related news
Nifty, Sensex Open Higher as Rupee Slips Past 96
Indian Markets Face Fed, Oil and West Asia Risks
US Fed Rate Hike May Pressure Indian Stocks, Analysts Say
GIFT Nifty Signals Cautious Start After Fed Rate Hike
Fed Rate Hike Signals Cautious Start for Indian Markets
Indian stock markets rebound as Sensex, Nifty rise early
Karamtara Engineering Shares Surge 26% In Strong Market Debut
NSE’s Rs 22,569-Crore IPO Opens With 9% Subscription
Six IPOs Make Varied Debuts, Led by LCC Projects
NSE Opens Doors to Public Investors After Decade-Long Wait
