Contrary to apprehensions stock markets might capitulate following an interest rate hike by the US Federal Reserve, global equity benchmarks were gainers...
Contrary to apprehensions stock markets might capitulate following an interest rate hike by the US Federal Reserve, global equity benchmarks were gainers on Thursday after the Fed raised rates by 25 basis points on Wednesday, reports fe Bureau in Mumbai.
Most Asian markets rallied more than 1% with the Shanghai Composite, Japan’s Nikkei and benchmark indices from Taiwan and Indonesia leading the charge. On Wednesday, US indices — both the Dow Jones Industrial Average and the S&P 500 — closed the session with gains of about 1.5%. This is the first hike in the benchmark rate in nearly 10 years.
Back home, both the 30-share Sensex and the broader Nifty clocked their biggest daily gains in nearly a month.
Foreign portfolio investors reversed their nearly month-long selling streak to buys shares worth close to $100 million. In December so far they have sold shares worth $500 million.
Traders seem to have taken a breather after the Fed chair Janet Yellen indicated the Federal Open Market Committee (FOMC), responsible for monetary policy, expects US economic conditions to evolve in manner that warrants only “gradual”increase in interest rates. The committee’s indication that the monetary policy stance remains “accommodative” as it looks to achieve its target inflation rate of 2% even as it recognised the strength in US economy allayed fears of steep normalisation in US interest rates which have stayed near zero (0.25%) for nearly seven years.