Nifty hits record as global mkts rally ahead of Fed meet
MUMBAI: The markets have ended at a new high on Monday as strong global markets drove bullish sentiment ahead of two-day meeting of Federal Reserve due this week. The Nifty ended at record high of 10170.70, up 85.30 points at closing while the Sensex was just 262.72 points away from touching its life high at 32,686.48. The 30-share index closed up 220.70 points at 32493.31.
Anand James, Chief Market Strategist, Geojit Financial Services Ltd said the markets touched new all-time high following positive global peers on the back drop of easing geopolitical tensions in the Korean peninsula, but hesitated to march further higher as the investors remained cautious ahead of the Federal Reserve policy meet starting tomorrow. “In advance to Securities and Exchange Board of India (SEBI) board meeting today, expectation of alterations in the fund raising norms for REITs and InvITs kept the real estate sector buoyant while investors keep a watchful eye on ongoing clamp down on the shell companies,” he added.
Markets worldwide rallied today with markets in South Korea’s benchmark Kospi and Hong Kong’s Hang Seng index ending over 1% higher. European markets were also on an upward trend in early trade.
So far in 2017, Indian markets have been outpacing peers with stellar performance. The Sensex and Nifty gained 21.77% and 24.03% respectively while MSCI India jumped 22.05%, MSCI Emerging Markets climbed 20.58% and MSCI World was up 7.08% in rupee terms.
Arun Thukral, MD & CEO, Axis Securities Ltd said, “The markets are factoring in corporate earnings growth followed by good monsoon and enhanced transparency with the implementation of different reforms. Indian economy is at the inflection point to take off in coming years, hence 10,000 or thereabouts on Nifty is just a milestone and the equity market has a bright future ahead.”
Foreign institutional investors (FIIs) who have selling Indian equities in September may be under pressure if there is any Fed rate action. FIIs have sold Indian equities worth Rs 43109.56 crore while domestic institutional investors (DIIs) are still on a buying spree in September. DIIs have bought domestic shares totaling Rs 33148.19 crore this month.
However, the central bank is unlikely to raise interest rates this time while it has already hiked rates twice this year. While the central bank is widely expected to keep the benchmark rate unchanged, more attention will be on whether officials announce reducing its $4.5 trillion balance sheet, said Bloomberg.