Will the US Fed’s hawkish tone, rate hike threat stop Sensex, Nifty rally; experts weigh bonds-stocks tradeoff
时间:2024-06-26 13:21:18 阅读(143)
The US Fed’s hawkish tone prompted a fall in the international and domestic share markets today. Indian equities still remain attractive for long term investors, albeit with a little concern over valuations amid rising interest rates, say experts. The markets had priced in a 50 bps rate hike from the FOMC (Federal Open Market Committee), but Fed chair Jerome Powell reiterated that the fight against rising inflation was set to continue, and signalled that the rates could rise more than previously expected. That seemed to have dampened the market spirits today.What the US Fed rate hike and commentary on inflation mean for Sensex, Nifty
“Indian markets have also opened negative following US markets, following the expectations of recession/slowdown and more hawkish comments from Fed. However, this is after a reasonable rally post US and India inflation data. For India and the RBI, there is the cushion of domestic economy holding with the external headwinds. RBI policy raised 35 bps this time, but if inflation comes below 6% once more, there is a larger scope for pause,” stated Anitha Rangan, Economist, Equirus.
“The Indian market, though not completely decoupled from the mother market US, has been charting a slightly different path exhibiting surprising resilience even in the face of global weakness. This is due to India’s superior growth and earnings prospects, going forward. However, high valuations and rising interest rates are likely to restrain the ongoing rally. Fixed income assets are becoming attractive,” said K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Outlook on US Fed’s further rate hikes“The latest policy action is pointing that slowing inflation has been encouraging and that the Fed believes further hikes, though at a slower pace, are needed to ensure that price pressures eventually drop to its 2% target,” Anand Varadarajan, Director, Asit C. Mehta Financial Services said. While US CPI inflation data suggests that inflation is cooling down, it is still higher than the Fed’s target. “Hence, this time it may be the case that Fed errs on the higher side of projected terminal rate instead of lower end,” added Vivek Goel, Joint Managing Director, Tailwind Financial Services.
“Powell also stated that the pace of policy hikes will be lower but emphasised that the pace does not matter anymore, and it is the terminal rate that matters,” said Anitha Rangan, Economist, Equirus.
Will inflation in the US fall?“The new dot plot shows that the peak interest rate now is expected to be around 5.1% with a small chance of going up to 5.6%,” Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital predicted. “The Fed confirms that the economy, in 2023, is likely to continue growing, albeit at a slower pace, the unemployment rate to peak at 4.6% and the PCE inflation to reach 3.1% and continue falling. All of these are very positive indicators,” he added.
“Notwithstanding some initial signs of a weakening economy, the Fed continued to worry about a strong labor market. Interestingly, although growth projection was revised down (to 0.5% from 1.2%) for CY23, the unemployment rate revisions were only marginal (4.6% to 4.4%),” said Hemang Jani, Head of Equity Strategy, Motilal Oswal Financial Services.
上一篇:India’s crude oil production falls 1% in April
下一篇:WPP is said to weigh options for 40% stake in Bain’s Kantar
猜你喜欢
- Markets Wrap – Wed, 11 Jan ‘23- Stocks fall, rupee gains; Asia, Europe markets, Gold, Crude, Crypto updates
- Investors must do scattered investing amid changing macro environment; IT sector attractive in mid-long term
- Mid-, small-caps steal a march over Nifty
- SEBI’s framework for governing council of social stock exchange explained
- Mid, smallcap stocks make a strong comeback
- Semiconductors and talent- our colleges, universities need to chip in
- Sensex, Nifty open in green on Monday; Tata Motors shares rise 1
- Markets Wrap – Mon, 13 Feb ‘23- Stocks fall, rupee depreciates; Asia, Europe markets, Gold, Crude, Crypto updates
- ITC shares extend losses, tank 3% today after hotel biz demerger announcement; should you buy, sell ITC stock-