Fed Rate Hike Scare Shakes The Market

Feb 17, 2017 | 04:55 PM IST

Market This Week

Market is looking much stronger than last week as FIIs have initiated buying in the market and DIIs are continuing to pump in capital as well. Quarter results of few of the giants have dragged the market some how in the last week but the major correction has been witnessed due to U.S. Fed President Yellen Janet commentary regarding the rate hike in the coming policies. Investors remained under some threat of rate hike. Looking at the past record of the rate hike news, this knife is hanging since last one year or even more than that. Any correction arising due to such policy news should be considered as fresh buying opportunity.

Movers & Shakers

The earning season ended yesterday, some companies brought cheer to the market and few results were not up to the mark. Some earnings were disappointing but global investors maintain a decent macro outlook for India. There could be a benefit of goods and services tax (GST) coming through and to add to it India has a good domestic growth story. Due to these developments, India is going to remain a favourable destination for institutional investors.

Key Market Drivers

Market pundits are of the opinion that is whether Fed will increase interest rates in March. Though what will be the pace for the rate hikes is still a matter of uncertainty. The US economy has begun to pick up and due to this, on the inflation front, there is no reason for the Fed to bring rates forward. US market has been scaling new highs in the last few days and the S&P 500 did not see even one percent correction in the last 85 trading days. On higher levels, it doesn't seem like good time to invest in US market which add attraction back to Indian equities.

Event Watch

Economic growth is largely dependent on the Financial inclusion hence it is a useful guide in the times of slowdown. As more people in India open bank accounts, it is only natural that India’s investment and savings rate will rise. Higher investment complements growth. For instance, after banks' nationalisation in 1969, banks were forced to open up branches in remote areas. In that period India’s investment and savings rate rose steeply from 13% in the early 1970s to around 25% of GDP in about 15 years. After demonetisation, India is on the verge of repeating the history. It could even get the economy back on the track with more stability and some better growth prospects.

Stocks to Watch

Gujarat Alkalies and Chemicals is on up side while Infratel is on down side.

 

ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While...
FULL BIO

LEAVE A COMMENT

RECOMMENDED READING

Reliance Industries Driven D-Street

Market Walk 22nd February, 2017: Reliance Industries driven market ended on positive note. The Sensex gained 103.12 points to 28864.71 Nifty gained 19.05 points to 8926.09 Reliance gained 11.17% to
Read More>>

Deal With Failures Like A Boss

Inspiring stories are not only about success, but they are also about how successful people deal with failures. If any success story just paints the uni-dimensional image of a person's success, it is bound to mislead the readers. Success can only
Read More>>

Last Hour Buying Gained D-street

Market Walk 21st February, 2017: Volatile market ended on positive after last hour buying. Sensex gained 100.01 points to 28761.59 Nifty gained 28.65 points to 8907.85 Axis Bank gained 5.34% to
Read More>>

Domestic And Global Cues Charging Market

Market Walk 20th February, 2017: Expiry week started on a positive note focusing GST council's approval to law for compensation. The Sensex gained 192.83 points to 28661.58 Nifty lost 57.5 points to 8879.2 TCS gained 4.03% to
Read More>>

Fresh Buying Lift Sentiments

Market Walk 17th February, 2017: Private banking and financial as well as pharma stocks supported market with fresh buying. The Sensex gained 167.48 points to 28468.75 Nifty lost 43.7 points to 8821.7 HDFC gained 6.94% to
Read More>>