Markets Take A Breather As US Rate Hike Prospects Ebb 

Mumbai: After declining in the previous two sessions, the market benchmark Sensex on Thursday rebounded on fresh buying after minutes of the US Fed July meeting cooled rate hike expectations. After losing 147.03 points in the last two sessions, the 30-share Sensex recovered 118.07 points or 0.42 per cent up to 28,123.44. Sensex recorded day’s high of 28,214.17 at 10:36am, but slipped on profit-booking. NSE Nifty bounced back 49.20 points or 0.57 per cent to 8,673.25. It shuttled in a range 8,690.70-8,645.05.

Brokers said, “the likely delay in US rate hike is positive for emerging markets, especially India, triggering fresh round of purchases by retail and institutional investors.” Minutes of the US Federal Reserve’s latest meeting released yesterday showed that policymakers were in no rush to raise interest rates.

Shares of Bharti Airtel settled with gains of over 2 per cent, following which the market capitalisation of the company surged by Rs 2,858 crore. Power Grid Corporation of India surged to 52-week high on the bourses and settled for the day with gains of over 4 per cent, adding Rs 3,871 crore to its mcap.

Market analysts say the likely delay in US rate hike is positive for emerging markets, especially India, triggering fresh round of purchases by retail and institutional investors. Risk appetite returned after Federal Open Market Committee (FOMC) minutes revealed lesser chances of a US rate hike soon. It also helped that Moody’s retained India’s growth forecast, pushing Indian equities higher.

“Risk appetite returned after FOMC minutes revealed lesser chances of a US rate hike soon. It also helped that Moody’s retained India’s growth forecast, pushing Indian equities higher,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Moody’s Investors Service has retained India’s growth forecast at 7.5 per cent for 2016 but revised upwards estimates for China to 6.6 per cent citing strong fiscal and monetary support.

In line with the overall trend, broader markets too turned positive with the small-cap and midcap indices recovering by up to 1.01 per cent. Overseas, Asian stocks ended mixed as indices in Hong Kong, South Korea and Taiwan rose by 0.05 per cent to 0.98 per cent while indices in China, Japan and Singapore fell by 0.17 per cent to 1.55 per cent. European markets were higher with key indices in France, Germany and the UK up by 0.20 per cent to 0.55 per cent.

Rupee slips 10paise

Rupee was trading lower by 10 paise at 66.86 against the US dollar at the Interbank Foreign Exchange. Dealers attributed the rupee’s fall to increased demand for the US currency from importers and banks. However, dollar’s weakness against the euro and yen, and a higher opening in domestic equity market restricted the fall. On Tuesday, the rupee had gained 13 paise to close at 66.76 a dollar as fresh selling of the US currency by exporters and banks helped it snap the two-day fall.

Source: PTI