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Nifty continues trading near record high as US Fed remains accomodative

ONGC, Adani Ports, HUL, L&T and Tata Motors were the biggest movers on the BSE Sensex

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Pranati Deva New Delhi
Last Updated : Mar 16 2017 | 11:14 AM IST
Benchmark indices opened at a higher note with Nifty hitiing fresh record high tracking global cues as US Federal Reserve Chair Janet Yellen made the well-anticipated move of increased rates by 25 bps in its effort to return monetary policy to a more normal footing.
 
Investors breathed a sigh of relief as Fed signaled no pick-up in the pace of rate hikes. It also stuck to its outlook for two additional rate increases this year and three more in 2018.

Nifty hit fresh record high of 9135, surpassing 9,122 levels reached on March 14, post BJP's UP election victory.
 
At 11:06 am, the S&P BSE Sensex was trading at 29,539 up 141 points, while the broader Nifty50 was ruling at 9,140 up 55 points.
 
The broader market was trading in line with the benchmark indices with BSE Midcap and BSE Smallcap up 1% and 0.9% respectively.
 
"Nifty is well placed above the 9,000 levels indicates strength and has a potential to test 9,140-9,240 levels in coming trading sessions. For Intraday support placed at 9,040/9,000 levels, as long as it sustain above the same the Bull rally is likely to continue its uptrend," said Nirmal Bang Research in a technical note.
 
On Wednesday, foreign portfolio investors (FPIs) bought shares worth a net Rs 1,141.13 crore, while Domestic institutional investors (DIIs) also bought shares worth a net Rs 126.75 crore, provisional data available with BSE showed.

Sector and Stocks
 
ONGC, Adani Ports, HUL, L&T and Tata Motors were the biggest movers on the BSE Sensex while HeroMoto Corp, Bharti Airtel and HDFC Bank were the top losers.

HCL Tech rose nearly 2% on reports that the company board will meet next week to consider stock buyback to boost shareholder value. 

Bharti Airtel fell 0.66 % on reports that it has shelved plans to sell controlling stake in its mobile tower arm Bharti Infratel but has decided to monetise 21.63% equity in the company.  

IOC gained nearly 1% after the Cabinet on Wednesday approved sale of state-owned company's 24% stake in Lubrizol India to Lubrizol Corporation, USA.
 
Fed hikes rate by 25 bps
 
The US Federal Reserve lifted its rate by 25 basis points for the second time in three months to a range of 0.75% to 1%, but said further increases would only be "gradual." The move was spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.
 
Fed Chair Janet Yellen pointed to growing faith in the economy's trajectory.
 
"We have seen the economy progress over the last several months in exactly the way we anticipated," Yellen said in a press conference following the end of a two-day policy meeting. "We have some confidence in the path the economy is on," Yellen said.
 
The Fed also stuck to its outlook for two additional rate increases this year and three more in 2018. The central bank lifted rates once in 2016.
 
Exports jumps in double digits
 
Rising for the sixth straight month, exports posted a 17.48% year-on-year hike in February, the highest rate in more than five years. . The previous high was 36.3%, in September 2011. Exports touched $24.49 billion in February; it was $20.84 billion in the same month last year.
 
Imports rose 21.76 % in February, primarily because of a staggering 147% rise in incoming gold ($3.48 billion).
 
The trade deficit narrowed to $8.8 billion in February, from $9.8 billion the previous month.
 
Global Markets
 
Asian peers Hang Seng and Shanghai were trading higher in morning trade after the US Federal Reserve hiked interest rates, as expected, but signalled ‘gradual’ rises.
 
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9% to its highest since mid-2015.
 
South Korea's market climbed 1% but Japan's Nikkei went the other way, easing 0.4%, as a jump in the yen pressured exporters.
 
The Dow had ended Wednesday with gains of 0.54%, while the S&P 500 added 0.84% and the Nasdaq 0.74%.

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