16.Dec.2015: Pre Market Report- Markets seen opening higher; Fed outcome eyed

Pre Session: Markets seen opening higher; Fed outcome eyed
16/12/2015


The Indian equity markets may see tad higher opening on Wednesday, taking firm cues from Asian peers and a strong finish on Wall Street overnight, ahead of the Fed decision. The domestic bourses may witness short-covering rally as markets are fully pricing in the expected Federal Reserve interest rate hike. Though, a hike in US interest rates from near zero levels may make emerging market assets relatively less attractive, raising fears over a capital flight from EMs. The CNX Nifty Index futures for December delivery rose 36.50 points, or 0.47 per cent, to 7736.50 at 10:24 am Singapore time, signaling a gap up opening for Dalal Street on Wednesday. On Tuesday, the Bombay Stock Exchange bellwether Sensex closed at 25320.44 up by 170.09 points or by 0.68 per cent, and the NSE Nifty ended 50.85 points higher at 7700.90 on account of buying in front line blue chip companies. The market sentiments remained optimistic most of the day, leading to across-the-board gains, as traders took some encouragement with report of India’s wholesale inflation, despite easing a bit remaining in negative territory for the thirteenth month, coming at -1.99 per cent in November compared to -3.81 per cent in October.

Globally, Asian stocks rebounded strongly on Wednesday tracking a strong finish on Wall Street overnight coupled with bounce in oil prices despite lingering concerns of oversupply in the market. Investors remained focus to a widely anticipated US interest rate increase by the Federal Reserve later today. China’s Shanghai Composite added modest gains, while Japan’s Nikkei 225 and Hang Seng surged over 2 per cent following Wall Street rally. Wall Street ended higher in overnight trade, making its second gain in more than a week, before a likely hike in US interest rates for the first time in almost a decade. All the three major indices, the Dow Jones Industrial Average added 0.9 percent and the S&P 500 closed 1.06 percent higher. Meanwhile, Nasdaq settled 43 points, or 0.87 percent, higher at 4,995.