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Sunday, May 28, 2023

Sensex: Here’s what market experts expect for Indian stock market after US Fed rate hike

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The Indian stock market is anticipated to stay nervous even if the US Fed meeting’s outcome was as anticipated because the US Central Bank has not yet made any commitments regarding inflation, which is still significantly higher than the US Federal Reserve considers to be comfortable.

Market analysts believed that the Indian stock market may stay in the base-building zone after the US Fed rate hike and rebound quickly from its current support levels since FIIs are anticipated to become aggressive following the US dollar’s depreciation. After the US Fed raises rates, they claimed that US bond movement will be crucial to monitor.

Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the impact of the US Fed rate hike on the Indian stock market today. “US Fed rate hike is what the market is expecting,” he said. However, the rate pause that is likely to begin in June was a plus. But in my opinion, the market may continue to be uneasy because the US Fed made no firm commitment to bringing down inflation, which is still significantly higher than its target range of around 2%.

Returning to support levels

Assuming that the base-building phase will last for some time and that present support levels will strongly recover, “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,” said Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher. However, the overall bias and daily trend are still positive, with significant support seen near the 17900–18000 band, and we can anticipate another rebound.

Santosh Meena, Head of Research at Swastika Investmart, commented on the effect of the US Federal Reserve’s rate hike on the Indian stock market today. He 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 is positive for emerging markets. Technically, the Nifty’s supply zone between 18,181 and 22,230 is crucial. Although we may anticipate a drop there, bulls will continue to be in control until the Nifty holds the 17,770 level.

Considering that the US Fed’s rate move is in line with predictions, there won’t be much of an influence on the Indian stock market.

MOFSL’s Head of Equity Strategy, Broking & Distribution, Hemang Jani, stated,  “The  US Fed rate hike seems to be the last one. However, rates could be lowered later only if there is a material fall in economic activity or inflation cools off.”

Since the RBI is no longer raising interest rates and the price of crude oil has fallen, this has caused a sell-off in US markets but may have little impact on India in the short term.

Today’s Indian stock market

As was to be predicted, the Indian stock market is experiencing shaky trading as all three of its major benchmark indices have been straddling the green and red lines.

After almost 45 minutes since the stock market opened today, Nifty Bank is in the red while Nifty and Sensex are in the green. Compared to its previous close, Nifty Bank is down about 39 points, while the Nifty is up 35 points and the BSE Sensex is up 39 points.

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