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 pave a smooth road for our clients in the shaky world of stock market. While...
FULL BIO

LEAVE A COMMENT

RECOMMENDED READING

Market Rallied Amid Geopolitical Tension; Banks Gained

Share Market News – 16 August 2017. Today's market opened positive factoring to positive global cues but profit booking was seen in mid session of the market, however, a great
Read More>>

Small and Midcap Rallied Post WPI Data

Share Market News – 14 August 2017 A great recovery has seen in market after bearish run of last 4 trading session specially in Small cap, Midcap and Metals sector stocks.
Read More>>

SEBI's List Left The Market 'Shell' Shocked!

Market This Week The market is below 10,000, yes you a heard it right. There was huge selling seen in this week especially in mid cap and small cap companies because of SEBI
Read More>>

How To Find The Right Stocks For Long-Term Investment

In the stock market, there is a distinction between an investor and a trader. Though both of them use the same medium - stocks - to reach their objective, there remains a sea difference between their style and approach. The investor is the one who
Read More>>

Profit Booking Continues; Nifty Below 9850

Share Market News – 10 August 2017 There was huge selling seen in today's market as yesterday's profit booking continued in each sector especially in midcap and smallcap
Read More>>