Indian equity benchmarks were extending gains for the third straight session on Thursday as risk sentiment improved significantly after minutes of the Federal Reserve’s latest meeting suggested a slower pace of future rate hikes was on the cards.
The BSE Sensex index was up 154.82 points at 61,665.40 and the broader NSE Nifty index was higher by 0.24 per cent in early trade.
“US Fed minutes boosted investor sentiments across the globe, with US Fed minutes indicating a firmer open on Friday. Assuming the bullish mood continues till the end. In that case, local traders may wind up “Today is the last day for derivatives expiry for the current month,” said Prashant Tapase, senior vice-president, research, Mehta Equities.
“Besides, fall in crude oil prices and uptrend in US dollar index are two positive catalysts, which will further drive sentiment,” he added.
Asian shares tracked Wall Street higher on Thursday, and a gauge of global shares rose to their highest levels in more than two months, and the dollar declined as Fed minutes revealed that a slow interest rate hike could be expected. was supported by most of the policy makers.
“Overall, it is clear from the minutes that FOMC participants are determined to raise the policy rate further in the face of a very tight labor market and unacceptably high inflation,” analysts at Barclays told Reuters.
“However, the minutes also reveal an emerging divergence of opinion among members about the peak rate and uncertainty about the peak rate.”
US futures climbed after the S&P 500 closed at a two-month high on Wednesday ahead of the Thanksgiving holiday.
The VIX, Wall Street’s “fear index” of implied volatility, fell just below its long-term average of 20.0 for the sixth straight day to a three-month low, in a clear signal that investors are firmly in “risk on risk” mode. Huh.
However, investors also assessed the impact of record COVID-19 cases against signs of weaker monetary conditions on the move in Hong Kong and the mainland.
The People’s Bank of China will allow banks to draw down capital reserves to stimulate growth, according to televised official remarks on Wednesday.
Gita Gopinath, the International Monetary Fund’s first deputy managing director, said in an interview with Bloomberg that China’s zero-Covid policy has had a “significant impact on consumption”, while the asset crisis is “hitting investments in the sector and assets”. affecting developers. Television.
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