Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 8 points at the opening bell.
Overseas, Asian stocks are trading lower Thursday after the U.S. Federal Reserve indicated on Wednesday that it would keep interest rates near zero through 2022.
In US, stocks finished mostly lower Wednesday even though the Federal Reserve pledged to hold interest rates unchanged at near zero through 2022, while keeping up at least its current pace of bond buying to support credit markets through the pandemic.
The Dow and S&P 500 closed lower for a second day, while the Nasdaq Composite booked its first finish above the 10,000 level and set a new intra-day record, led by gains in Amazon, Apple, Alphabet and Netflix.
Investor reaction to the Fed's recent economic forecast was watched on Thursday. The U.S. central bank kept interest rates unchanged on Wednesday and indicated it does not expect to raise them through 2022. The Fed also expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021. Meanwhile, Fed's balance sheet has ballooned from about $4 trillion in March to $7.21 trillion as of last week, while its policy interest held steady at a range of 0% and 0.25%.
The central bank noted in the statement after its policy meeting ended that the viral outbreak has caused a sharp fall in economic activity and surge in job losses. Fed officials estimate that the economy will shrink 6.5% this year, in line with other forecasts, before expanding 5% in 2021. They foresee the unemployment rate at 9.3%, near the peak of the last recession, by the end of this year. The rate is now 13.3%.
The Fed also specified that it will buy $80 billion of Treasury securities a month and $40 billion in mortgage-backed securities. The central bank has been slowing its purchases from as high as $375 billion a month in March. But this is the first time that the Fed has indicated the size of the purchases it will pursue in the coming months.
Back home, key barometers ended with modest gains on Wednesday. The barometer S&P BSE Sensex rose 290.36 points or 0.86% at 34,247.05. The Nifty 50 index climbed 69.50 points or 0.69% at 10,116.15.
Foreign portfolio investors (FPIs) sold shares worth Rs 919.26 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 500.70 crore in the Indian equity market on 10 June, provisional data showed.
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