Stock Markets staged a strong rebound today as the benchmark indices gained. Sensex gained 183 points to close at 26697.82 and the Nifty 50 gained 51 points to close at 8221.80. Index heavyweight stocks such as Tata Motors, Reliance Industries, HDFC and ITC led the gains.
Stock markets started the day with huge volatility; however the momentum shifted in the last hours. In last few hours’ market gained strength and closed in green. This uptrend is crucial ahead of the important US Fed meeting outcome.
Mr Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services also cautioned. He said that “Market gained on account of positive European market and short covering ahead of FED policy tomorrow. Investors are eyeing today’s CPI data to ascertain the extent of demonetizations impact. This was in conjunction with RBI’s recent monetary policy stance.”
Positive start by European markets and short covering led to the bounce today. Meanwhile, in currency trades, the rupee ended lower at 67.54 against the US Dollar. It was down by 12 paise from yesterday’s closing.
Jayant Manglik of Religare Securities said that “he does not expect any ease in intraday volatility in near future. And, traders are hedging and also waiting for further clarity.”
It is widely expected that US Fed will raise the interest rates by 25 basis points. The outlook would be the key thing to watch from this meeting. Investors are also focusing on president-elect Donald Trump’s policies as well as Dollar’s trend.
Adrian Mowat of JPMorgan said that “The biggest headache for global portfolio managers is to position the portfolios correct in terms of sectors. Investors would like to get through the first 100 days to get a better sense of what the actual policies are that are going to come out of the Trump administration. And also an expectation that dollar strength is front-loaded,”