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Indian Share Markets Open Flat; Energy and Automobile Stocks Lag
Wed, 20 Mar 09:30 am | Rini Mehta, TM Team

Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.3% while the Hang Seng is up 0.1%. The Nikkei 225 is trading up by 0.1%. Meanwhile, the benchmark S&P 500 index ended little changed on Tuesday as investor optimism regarding the Federal Reserve's expected affirmation of its dovish policy stance was offset by reports of fault lines emerging in ongoing US-China trade negotiations.

Back home, India share markets opened on a flattish note. The BSE Sensex is trading down by 12 points while the NSE Nifty is trading down by 10 points. Both, the BSE Mid Cap index and BSE Small Cap index opened on a flat note.

Sectoral indices have opened on a mixed note with IT stocks and realty stocks leading the pack of gainers. Oil & gas stocks and automobile stocks have opened the day in red.

The rupee is currently trading at 69.02 against the US$.

Halting its six-day winning run, the Indian rupee Tuesday edged lower by 43 paise to close at 68.96 to the US dollar on emergence of demand for the greenback from importers.

The local currency also came under pressure due to rising crude pressure and a caution ahead of the outcome of the Federal Open Market Committee (FOMC) meeting.

At the Interbank Foreign Exchange (forex), the domestic currency opened at 68.53 a dollar and fell further to touch the day's low of 69.05. It finally settled at 68.96 per dollar, down 43 paise over its previous close.

The Indian rupee on Monday had surged by 57 paise to close at an over seven-month high of 68.53 against the US dollar.

Asia's worst-performing currency took five weeks to become its best.

The turnaround was fueled by the improved chances of Prime Minister Narendra Modi winning a second term amid recent tensions between India and Pakistan.

The optimism has led to local shares and debt luring robust flows, which have turned the carry-trade returns on the rupee to the highest in the world in the past month.

Moving on to the news from global markets. The Federal Open Market Committee, or FOMC, the policy-making arm of the Federal Reserve will come up with its latest interest-rate decision and economic forecast today.

While an interest rate hike (or cut) seems to be unlikely, there is still quite a bit for investors to keep their eyes on.

As per the reports, while there's a higher probability of a rate change in the March meeting than there was in January (the Fed typically only moves rates in March, June, September, or December), it's still not very likely.

The Fed has given the market indications that it is taking a wait-and-see approach for the time being, with FOMC Chair Jerome Powell saying that the committee would be patient with any future rate hikes.

So, unless we get a surprise with a rate change, the target range for the federal funds rate will remain 2.25% to 2.5% at the conclusion of this week's FOMC meeting.

However, that doesn't mean this will be a non-event by any means.

Another major piece of the puzzle is the FOMC's carefully worded statement. In January, the last time the committee met, the statement had a distinctly dovish tone. In fact, the addition of the word "patient" and certain other language in the statement caused a market rally.

Along with its statement, the FOMC will release its forecasts for certain economic data, such as GDP growth, unemployment, and inflation. These are significant because they are the data points the FOMC uses when making policy decisions.

Finally, pay attention to any clarification the Fed gives about its balance sheet reduction plans. Investors have been worried that the agency could unwind its multitrillion-dollar balance sheet too quickly. A separate statement issued in January indicated that the FOMC plans to be patient with its balance-sheet reduction.

Now speaking of Fed rate policy impact on India, how has the Fed rate hike impacted Indian stock markets in the past?

The past decade has seen Fed rates at historical lows, but it wasn't always the case.

The period from 2003-2006 saw Fed rates increase from 1% to 5.25%.

How did the Indian stock market fare during this time?

Do US Interest Rate Hikes Impact Indian Markets?

Well, if you are a long-term investor, you have nothing to worry about.

The Sensex went up by almost 3 times from 3,500 to more than 10,000 during the same period.

The rise was supported by strong earnings growth during the same period.

It further emphasizes the importance of fundamentals in the long run.

Look out for quality stocks with a history of strong earnings growth and sound fundamentals.

The noise surrounding the decisions of the US Fed might just present the right opportunity for you to buy safe stocks.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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

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Stock Market Updates

Sensex Ends 135 Points Lower; Realty and Telecom Stocks Witness Selling (Today's Market)

Apr 18, 2019 Closing

The BSE Sensex ended the day down by 135 points, while the NSE Nifty closed down by 44 points.

RELIANCE CAPITAL Plunges by 10%; BSE 500 Index Down 0.4% (Today's Market)

Apr 18, 2019 02:04 PM

RELIANCE CAPITAL share price has plunged by 10% and its current market price is Rs 173. The BSE 500 is down by 0.4%. The top gainers in the BSE 500 Index are SPICEJET (up 5.9%) and STAR CEMENT LTD (up 5.9%). The top losers are RELIANCE CAPITAL (down 10.0%) and JET AIRWAYS (down 29.4%).

CRISIL Plunges by 5%; BSE 500 Index Down 0.5% (Today's Market)

Apr 18, 2019 01:30 PM

CRISIL share price has plunged by 5% and its current market price is Rs 1,600. The BSE 500 is down by 0.5%. The top gainers in the BSE 500 Index are SPICEJET (up 5.6%) and DEEPAK FERTILISERS (up 3.9%). The top losers are CRISIL (down 5.0%) and RADICO KHAITAN (down 5.2%).

Sensex Turns Red; Jet Airways Bleed (Today's Market)

Apr 18, 2019 12:30 pm

The BSE Sensex is trading down by 111 points, while the NSE Nifty is trading down by 34 points.

RADICO KHAITAN Plunges by 5%; BSE 500 Index Down 0.5% (Today's Market)

Apr 18, 2019 10:42 AM

RADICO KHAITAN share price has plunged by 5% and its current market price is Rs 354. The BSE 500 is down by 0.5%. The top gainers in the BSE 500 Index are SPICEJET (up 6.9%) and DEEPAK FERTILISERS (up 3.4%). The top losers are RADICO KHAITAN (down 5.0%) and RELIANCE CAPITAL (down 7.6%).

DISH TV Plunges by 5%; BSE 500 Index Down 0.6% (Today's Market)

Apr 18, 2019 10:28 AM

DISH TV share price has plunged by 5% and its current market price is Rs 40. The BSE 500 is down by 0.6%. The top gainers in the BSE 500 Index are SPICEJET (up 5.9%) and IPCA LABS (up 3.5%). The top losers are DISH TV (down 5.3%) and PRESTIGE ESTATES (down 5.5%).

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