Indian shares edge up, Fed delivers on expected lines
BENGALURU — Indian shares snapped a four-session decline on Thursday, boosted by financials, after investors had already priced in the aggressive rate hike by the U.S. Federal Reserve.
The NSE Nifty 50 index pared initial gains and was up 0.3% at 15,733.35, as of 0500 GMT. The index jumped over 1% in the first few minutes of trade.
The BSE index rose 0.4% to 52,722.57.
The U.S. central bank on Wednesday approved its biggest interest rate hike since 1994 and projected a slowing economy and rising unemployment in the months to come.
“The Fed is finally catching up with the actual trend and it is safe to say we are in sync with reality,” said Ajit Mishra, vice president Research at Religare Broking.
The 75-basis-point move was already factored in by the market after hot inflation data last week spooked investors, sending the NSE index down 3% so far this week.
“A short intraday rebound is not likely to lead to a reversal, unless we see a definite rebound in U.S. markets and only then can we shift to positive bias from the current negative one,” Mishra added.
After the Fed rate hike, financials and banking stocks gained with the NSE Bank index up 0.6%.
On the Nifty 50, heavyweights Maruti Suzuki and Reliance Industries were the top gainers, up 1.7% and 1%, respectively.
Analysts at J.P.Morgan upgraded Reliance to “overweight” from “neutral.”
Gains were capped by losses in energy stocks, with the Nifty Energy index trading flat.
Shares of budget carrier SpiceJet fell 3.6% after the company’s managing director said the hike in aviation turbine fuel price was “not sustainable.” (Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu and Shailesh Kuber)
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