Stock In­dices Scale Fresh Highs, Traders Turn Cau­tious

The Economic Times - - Companies: Pursuit Of Profit Catch The Signal: Gea -

Mum­bai: The stock mar­ket hit record highs on Mon­day as the bullish mo­men­tum played out in the ab­sence of ad­verse news flow. The un­der­tone, how­ever, was in­creas­ingly cau­tious with the Volatil­ity In­dex (VIX) ris­ing 5.6%, sug­gest­ing traders are uneasy with the cur­rent mar­ket lev­els. Bench­mark in­dices closed at all-time highs with the BSE Sen­sex ris­ing 108.94 points to close at 33,266.16. The Nifty gained 40.60 points to 10,363.65. Lupin gained 2.7%, ONGC rose 1.7% and Bharti Air­tel ad­vanced 1.6%. Mid- and smallc a p s h a r e s o u t p e r f o r med bluechips with their in­dices ris­ing 1.1% and 1.2%, re­spec­tively, on Mon­day. “It is the mo­men­tum that is tak­ing the mar­kets higher these days rather than earn­ings where there is noth­ing to cheer about as of now,” said R Venkat Subra­ma­nian, chief ex­ec­u­tive, In­fina Fi­nance, a pro­pri­etary in­vest­ment firm be­long­ing to the Ko­tak Group.

“This­may­con­tin­uetill­investors find that there are up­side risks to the low in­ter­est rates they are us­ing in their earn­ing mod­els,” said Subra­ma­nian. Global mar­kets are watch­ing the out­come of the US Fed­eral Open Mar­ket Com­mit­tee’s two­day meet­ing end­ing Thurs­day. While the Amer­i­can cen­tral bank is ex­pected to keep the key pol­icy rate un­changed, in­vestors are watch­ing the Fed’s com­ments on in­fla­tion and fu­ture in­ter­est rate hikes. In­vestors ex­pect the US cen­tral bank to in­crease a key pol­icy rate hike in De­cem­ber, the third in 2017, as in­fla­tion­ary pres­sures are show­ing signs of build­ing up. The mar­kets is also wait­ing to learn US Pres­i­dent Don­ald Trump’s choice for the Fed chair.

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