Mumbai (Maharashtra), India, March 20 (ANI): The Indian equity market commenced trading on an upbeat note on Thursday after the US Federal Reserve opted to maintain its interest rates.
The Fed also revised down its growth projections while raising inflation and unemployment estimates. Investors responded positively to these developments, leading to a surge in both the Sensex and Nifty indices.
When the opening bell rang, the Sensex rose 381.49 points to 75,830.54, while theصندキャンペ Nifty achieved 118.65 points, starting at 23,026.25. The market mood stayed optimistic, as evidenced by 41 out of 50 stocks showing gains. Nifty Companies reported increases, with just 9 experiencing decreases.
Among the leaders in gains are Nifty The index included companies such as Wipro, Infosys, Bharat Electronics Limited (BEL), Hero MotoCorp, and HCL Technologies. Conversely, HDFC Life, UltraTech Cement, JSW Steel, Sun Pharma, and Dr Reddy's Laboratories experienced the largest declines.
Ajay Bagga, a specialist in banking and markets, commented, "Yesterday, all central banks responded as anticipated by the market. The Bank of Japan decided to hold off, mentioning ongoing uncertainties in trade policies as a persistent drag on their economy."
He stated, "In response to significant declines in the Rupiah and the stock market—driven by reduced consumer spending and deteriorating business confidence—Bank Indonesia decided against additional rate reductions. Meanwhile, the PBOC chose not to modify its prime rates today for major loan periods."
The central bank of Brazil opted for a distinct strategy by increasing interest rates by 100 basis points, which marks their third successive increase. This action was intended to curb growing inflation, pushing the reference Selic rate up to 14.25%. It’s worth noting this figure hasn’t been observed since 2016.
The key event, however, was the US Federal Reserve's policy decision which held interest rates steady, lowered growth projections, raised expected inflation and unemployment figures and reduced quantitative tightening (QT) from USD 25 billion to USD 5 billion per month
Bagga indicated that the US market responded favorably to these adjustments, viewing them as a dovish indication from the Federal Reserve. As a result, Wall Street experienced gains, bond yields went down, and the US dollar appreciated. The decrease in quantitative tightening is regarded as a form of indirect monetary loosening, potentially enhancing global liquidity conditions.
Even with ongoing foreign portfolio investment divestment, Indian markets still managed to climb, indicating robust internal strength. Nifty 50 is poised to reach the 23,000 level, potentially igniting another market surge by pressuring short bets. Nonetheless, worries persist about international trade disputes, especially concerning retaliatory tariffs scheduled to come into play on April 2nd.
In light of worldwide uncertainties, gold prices have reached unprecedented levels, with investors seeking refuge in secure assets. Worries about economic conditions, political unrest, and safety threats have collectively boosted the attractiveness of gold.
Bagga stated, "Gold kept reaching new peaks as economic, political, and security worries bolstered its appeal. The Indian market climbed notwithstanding continuous foreign portfolio investor sales and is poised to surpass the 23,000 level." Nifty 50 today, potentially causing short positions to tighten and leading to a more significant increase. Continued foreign portfolio investor selling still looms overhead."
He stated, "The primary concern for the market continues to be the reciprocal tariffs scheduled for April 2nd, which might trigger extensive tariff implementations globally and initiate a chain of retaliations. Considering this, we maintain our reserved stance towards the Indian markets even though we've observed some recovery recently." (ANI)
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