Indian benchmark indices opened mixed today as investors digest US Federal Reserve’s rate hike and take cues from their Asian counterparts. BSE Sensex opened 66.98 points or 0.22% higher at 31,222.89 points, while NSE Nifty, the broader gauge, opened flat at 9,617.90 points. At 9:32 am, BSE Sensex was trading 21.75 points or 0.07% lower at 31,134.16 points while the NSE Nifty was down 22.15 points or 0.23% at 9,596.00 points. Adani Ports was leading the gains and was up 1.67% at Rs 365.50 on the NSE, while GAIL was down the most, losing 1.89% at Rs 373.85.
The Federal Reserve raised interest rates by 25 basis points on Wednesday, the second such hike in three months, citing continued US economic growth and job market strength, and announced it would begin cutting its holdings of bonds and other securities this year. The US central bank also gave the first clear outline on its plan to reduce its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities.
“The initial cap for the reduction of the Fed’s Treasuries holdings would be set at $6 billion per month, increasing by $6 billion increments every three months over a 12-month period until it reached $30 billion per month,” said a Reuters report.
However, weaker than expected inflation numbers posed a question mark about the pace of economic growth. Data showed US consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months.
The Dow Jones Industrial Average rose 46.09 points, or 0.22 percent, to 21,374.56, the S&P 500 lost 2.43 points, or 0.10 percent, to 2,437.92 and the Nasdaq Composite dropped 25.48 points, or 0.41 percent, to 6,194.89.
Asian equities turned cautious on Thursday after the US Federal Reserve raised interest rates for the second time this year, as was widely expected by markets. At 7 am Indian time, Nikkei was down 116 points, Hang Seng 249 points, Kospi gave up earlier gains to decline 0.75 percent, but Chinese markets were trading mixed.
Crude oil slipped to its lowest levels in seven months early today. Brent crude futures were down 7 cents or 0.2 per cent at $46.93 per barrel, while WTI crude futures were down 12 cents or 0.3 per cent at $44.61 a barrel.