Pre Session – Gap up opening seen for Sensex as Fed meet eyed
16/09/2015
Indian equity benchmarks are poised to open higher on Wednesday as traders await the start of the two-day monetary policy meet of the US Federal Reserve today, with the world’s top central bank likely to resist a maiden interest rate lift-off since 2006 this week, amidst the recent China induced global market mayhem and soft US inflation. Against the backdrop of a positive trend in Asian stocks and a bullish finish at Wall Street overnight, coupled with strength in the SGX CNX Nifty Index futures for September delivery which climbed by 0.84 per cent or 66 points at 7,889 at 10:41 am Singapore time, Dalal Street is set for a strong opening today. The 30-share Sensex on Tuesday tanked 150.77 points or 0.58 per cent to end at 25,705.93 as caution gripped investors amidst uncertainty surrounding the outcome of the US Federal Reserve’s policy meet, and a renewed rout in Chinese equities. A hike in US borrowing costs may increase global risk aversion, accelerating capital outflows from emerging markets, thereby exerting further downward pressure on the rupee.
Meanwhile, foreign investors have halted a sell-off in Indian markets, with overseas funds making net purchases of Indian shares worth USD 20.5 million on September 14, the first inflow in 11 days. Markets are betting on a rate cut by the RBI on September 29 with inflationary pressures on the wane, supporting sentiment at Dalal Street. India’s consumer price inflation eased to 3.66 per cent in August 2015 from a revised 3.69 per cent in July 2015 while wholesale inflation shrank for a tenth month. Meanwhile, India’s trade gap widened to USD 12.48 billion in August 2015 from USD 10.7 billion a year ago, with exports contracting for a ninth month on the trot, declining 20.7 per cent, year on year to USD 21.3 billion in August 2015 as a global slowdown hurts Asia’s third biggest economy.
Asian stocks were trading higher ahead of the FOMC policy meet in which the Fed may decide whether to raise interest rates from zero, for the first time in nearly a decade. While stocks in mainland China rebounded from the biggest two-day sell-off in three weeks, Hang Seng surged and Japan’s Nikkei 225 jumped as a weaker yen boosted the appeal of exporter stocks. Wall Street closed on a bullish note on Tuesday with each of the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 rallying by more than 1 per cent after US retail sales rose for a second straight month in August, a sign that the biggest part of the world’s largest economy i.e. consumer spending, remains in resilient shape as the Fed considers raising borrowing costs.
16/09/2015
Indian equity benchmarks are poised to open higher on Wednesday as traders await the start of the two-day monetary policy meet of the US Federal Reserve today, with the world’s top central bank likely to resist a maiden interest rate lift-off since 2006 this week, amidst the recent China induced global market mayhem and soft US inflation. Against the backdrop of a positive trend in Asian stocks and a bullish finish at Wall Street overnight, coupled with strength in the SGX CNX Nifty Index futures for September delivery which climbed by 0.84 per cent or 66 points at 7,889 at 10:41 am Singapore time, Dalal Street is set for a strong opening today. The 30-share Sensex on Tuesday tanked 150.77 points or 0.58 per cent to end at 25,705.93 as caution gripped investors amidst uncertainty surrounding the outcome of the US Federal Reserve’s policy meet, and a renewed rout in Chinese equities. A hike in US borrowing costs may increase global risk aversion, accelerating capital outflows from emerging markets, thereby exerting further downward pressure on the rupee.
Meanwhile, foreign investors have halted a sell-off in Indian markets, with overseas funds making net purchases of Indian shares worth USD 20.5 million on September 14, the first inflow in 11 days. Markets are betting on a rate cut by the RBI on September 29 with inflationary pressures on the wane, supporting sentiment at Dalal Street. India’s consumer price inflation eased to 3.66 per cent in August 2015 from a revised 3.69 per cent in July 2015 while wholesale inflation shrank for a tenth month. Meanwhile, India’s trade gap widened to USD 12.48 billion in August 2015 from USD 10.7 billion a year ago, with exports contracting for a ninth month on the trot, declining 20.7 per cent, year on year to USD 21.3 billion in August 2015 as a global slowdown hurts Asia’s third biggest economy.
Asian stocks were trading higher ahead of the FOMC policy meet in which the Fed may decide whether to raise interest rates from zero, for the first time in nearly a decade. While stocks in mainland China rebounded from the biggest two-day sell-off in three weeks, Hang Seng surged and Japan’s Nikkei 225 jumped as a weaker yen boosted the appeal of exporter stocks. Wall Street closed on a bullish note on Tuesday with each of the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 rallying by more than 1 per cent after US retail sales rose for a second straight month in August, a sign that the biggest part of the world’s largest economy i.e. consumer spending, remains in resilient shape as the Fed considers raising borrowing costs.
