Pre Session- Sensex Bulls to remain dominant on global rally amid dovish Fed stance
17/03/2016
Indian equity benchmarks are tipped to witness a gap up opening on Thursday tracking a bullish trend in markets across Asia and a positive finish at Wall Street overnight after the US Federal Reserve scaled back its trajectory for raising interest rates this year, citing rising global economic and financial risks to growth in the world’s biggest economy, bolstering risk taking appetite. The Fed which kept unchanged its target range for the benchmark federal funds rate between 0.25 to 0.5 per cent, pared back the number of rate hikes it anticipates in 2016 from two to four earlier, as it weighs the potential impact on slowing global growth and financial volatility on US growth. Strength in the CNX Nifty Index futures for March delivery which climbed by 1.14 per cent or 86.5 points at 7,612 at 10:27 am Singapore time, signals a bullish opening for the Sensex today. A fifteenth straight contraction in India’s exports in February, which fell by 5.6 per cent, year on year, raised fears over the impact of a global slowdown on growth in Asia’s third biggest economy, bolstering the case for a further interest rate cut by the Reserve Bank of India (RBI) to buoy domestic demand and help shield the country from rising global risks. The RBI next meets on April 5, with economists expecting a 25 basis points cut in the repo rate. The 30-share Sensex on Wednesday rallied by 131.31 points or by 0.53 per cent to end at 24,682.48 tracking a rebound in oil prices and gains in most European equities.
Asian stocks scripted a handsome rally after Fed said that it expects two interest rate hikes of 25 bps each in 2016, down from four earlier, projecting the benchmark rate to stand at 0.875 per cent at the end of the year, implying a more dovish policy stance. The Fed also acknowledged the rising risks to the American economy from global economic and financial weakness as it cut its median US growth forecast for 2016 to 2.2 per cent from 2.4 per cent, while that for next year was slashed to 2.1 per cent from 2.2 per cent. China’s Shanghai Composite eked out modest gains led by gains in commodity producers, while Hang Seng rallied over 1 per cent and Japan’s Nikkei 225 also jumped over 1 per cent on Fed optimism, overshadowing a fifth straight drop in exports in February. Wall Street climbed on Wednesday as the Fed signaled a slower than expected path of interest rate increases while predicting economic activity in the US to continue expanding at a moderate pace with labour market indicators continuing to strengthen but rising global uncertainty threatening to pose risks. Further, US housing starts rose 5.2 per cent to an annual pace of 1.18 million in February while factory production climbed for a second straight month, up by 0.2 per cent in February, easing fears of a slowdown in the economy, supporting sentiment. The Dow Jones Industrial Average climbed 0.43 per cent; the Nasdaq Composite advanced 0.75 per cent while S&P 500 rose 0.56 per cent.
17/03/2016
Indian equity benchmarks are tipped to witness a gap up opening on Thursday tracking a bullish trend in markets across Asia and a positive finish at Wall Street overnight after the US Federal Reserve scaled back its trajectory for raising interest rates this year, citing rising global economic and financial risks to growth in the world’s biggest economy, bolstering risk taking appetite. The Fed which kept unchanged its target range for the benchmark federal funds rate between 0.25 to 0.5 per cent, pared back the number of rate hikes it anticipates in 2016 from two to four earlier, as it weighs the potential impact on slowing global growth and financial volatility on US growth. Strength in the CNX Nifty Index futures for March delivery which climbed by 1.14 per cent or 86.5 points at 7,612 at 10:27 am Singapore time, signals a bullish opening for the Sensex today. A fifteenth straight contraction in India’s exports in February, which fell by 5.6 per cent, year on year, raised fears over the impact of a global slowdown on growth in Asia’s third biggest economy, bolstering the case for a further interest rate cut by the Reserve Bank of India (RBI) to buoy domestic demand and help shield the country from rising global risks. The RBI next meets on April 5, with economists expecting a 25 basis points cut in the repo rate. The 30-share Sensex on Wednesday rallied by 131.31 points or by 0.53 per cent to end at 24,682.48 tracking a rebound in oil prices and gains in most European equities.
Asian stocks scripted a handsome rally after Fed said that it expects two interest rate hikes of 25 bps each in 2016, down from four earlier, projecting the benchmark rate to stand at 0.875 per cent at the end of the year, implying a more dovish policy stance. The Fed also acknowledged the rising risks to the American economy from global economic and financial weakness as it cut its median US growth forecast for 2016 to 2.2 per cent from 2.4 per cent, while that for next year was slashed to 2.1 per cent from 2.2 per cent. China’s Shanghai Composite eked out modest gains led by gains in commodity producers, while Hang Seng rallied over 1 per cent and Japan’s Nikkei 225 also jumped over 1 per cent on Fed optimism, overshadowing a fifth straight drop in exports in February. Wall Street climbed on Wednesday as the Fed signaled a slower than expected path of interest rate increases while predicting economic activity in the US to continue expanding at a moderate pace with labour market indicators continuing to strengthen but rising global uncertainty threatening to pose risks. Further, US housing starts rose 5.2 per cent to an annual pace of 1.18 million in February while factory production climbed for a second straight month, up by 0.2 per cent in February, easing fears of a slowdown in the economy, supporting sentiment. The Dow Jones Industrial Average climbed 0.43 per cent; the Nasdaq Composite advanced 0.75 per cent while S&P 500 rose 0.56 per cent.
