How US Fed rate hike will impact Indian stock market today — explained
Stock market today: After the outcome of US Fed meeting on expected lines, Indian stock market is expected to remain jittery as no commitment from the US Central Bank has come on the inflation, which is still much higher than the comfort of US Federal Reserve.
Market experts maintained that after the US Fed rate hike, Indian stock market may continue to remain in base building zone and bounce back strongly from its current support levels as FIIs are expected to become aggressive after weakness in the US dollar.
They said that US bond movement will be key to watch post-US Fed rate hike.
Speaking on US Fed rate hike impact on Indian stock market today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “US Fed rate hike is in line with the market expectations.
But, good part was rate pause likely from June onwards.
But, in my view, market may remain jittery as US Fed didn’t gave any strong commitment on pulling down the inflation, which is still much above its comfort zone of around 2 per cent.”
Bounce back from support levels
Expecting the base building mode to continue for some time and strong bounce back from current support levels, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, “Nifty took a pause near 18200 zone witnessing resistance and shed off some of its gains to take a breather closing below the 18100 levels.
However, the overall bias and daily trend is still maintained positive with major support witnessed near the 17900 – 18000 band and can expect again for a bounce back.”
US dollar in focus
Speaking on the impact of US Fed rate hike on Indian stock market today, Santosh Meena, Head of Research at Swastika Investmart said, “The US stock market reacted negatively to it, but there is a sharp fall in crude oil prices, US bond yields, and the dollar index, which are positive for emerging markets.
Technically, 18,181–18,230 is a critical supply zone for the Nifty, where we can expect some pullback, but bulls will remain in the driver’s seat till the Nifty holds the 17,770 level.”
SWASTIKA INVESTMART
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Not expecting much impact on the Indian stock market as the US Fed rate hike is in line with the expectations, Hemang Jani, Head – Equity Strategy, Broking & Distribution, MOFSL said, “Fed hike seems like this is the last rate hike, but rate cuts could happen later only if there is significant deterioration in economic activity or inflation cools off. This led to sell off in US markets but may not have a material impact on India in the short run as RBI has paused the rate hikes and there is weakness in the crude oil price.”
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