Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

Are you sitting on the sidelines
while this small cap trend unfolds?

(Minor market corrections will not stop this)




**Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
**By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.


AD

Sensex Continues Momentum; Metal Sector Up 2.5%
Fri, 23 Feb 11:30 am

After opening the day on a positive note, stock markets in India have continued their momentum. Sectoral indices are trading on a positive note with stocks in the metal sector and healthcare sector witnessing maximum buying interest.

The BSE Sensex is trading up 212 points (up 0.6%) and the NSE Nifty is trading up 69 points (up 0.7%). The BSE Mid Cap index is trading up by 1.3%, while the BSE Small Cap index is trading up by 1.2%. The rupee is trading at 64.82 to the US$.

In the news from global financial markets, US stock markets witnessed buying interest in overnight trade after St Louis Fed President James Bullard reportedly said that central bankers need to be careful not to increase rates too quickly this year as it could slow the world's largest economy.

The above comments amid a release of an official account of the Federal Reserve's most recent policymaking meeting which stated that robust growth in the US economy has increased the confidence of Federal Reserve officials that the country is ready for higher interest rates.

The account said Fed officials have upgraded their economic outlooks since the beginning of the year. They have listed three main reasons for the rise in interest rates which are the strength of recent economic data, accommodative financial conditions and the expected impact of the US$ 1.5 trillion tax cut that took effect in January.

Just Released: Multibagger Stocks Guide
(2018 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Many expect that a tightening labour market and increased government spending would further boost inflation and will force the Fed to be more aggressive in raising interest rates this year. This, in turn, would slow down the economic growth.

The Fed has forecast three rate hikes this year. The first increase expected at its next policy meeting in March.

In its latest meeting, the Fed said it expects "further gradual" rate increases. The target range for the federal funds rate currently is 1.25% to 1.50%.

Note that with the US economy chugging along for many months, the Fed is now gradually easing off the stimulus it provides to the economy by raising interest rates to more normal levels.

Federal Reserve Rate Hike in the Past 3 Years

How does a US interest rate hike affect Indian investors?

The instant effect is foreign money moving out of India's vaults. This means a slight correction in the share market in India, albeit temporarily.

While this might provide a good buying opportunity in long-term stocks, the main thing to look forward would be capex and earnings trends.

In the end, Indian investors are better off staying informed about the corporate earnings revival than Fed rate hikes.

In the news from commodity markets, crude oil is witnessing selling pressure today as high US crude exports outweighed lower crude inventories in the world's biggest consumer of the fuel.

Data released by the Energy Information Administration (EIA) showed that US crude exports jumped to just above 2 million barrels per day (bpd) last week, close to a record high of 2.1 million hit in October. This helped pull down net imports to the lowest level on record of below 5 million bpd.

Note that crude oil prices have corrected sharply in February. Rising US oil production and crude stockpiles, as well as a stock market sell-off, heaped pressure on oil prices this month.

It will be interesting to see how the OPEC and Russia react to the increasing oil supply from the US in the coming days.

To keep a tab on the movements in crude oil and other commodities, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency, and commodity markets.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Sensex Continues Momentum; Metal Sector Up 2.5%". Click here!