Moneycontrol
Mar 16, 2017 08:05 AM IST | Source: Moneycontrol.com

What changed for market while you were sleeping? 10 things you should know

Here’s are top cues from domestic as well as international markets which could have a bearing on D-Street

What changed for market while you were sleeping? 10 things you should know

Kshitij Anand

Moneycontrol News

The Nifty might just make a fresh high on Thursday after the US Federal Reserve decided to stay on course and increase interest rates for the second time in three months. The Reserve Bank of India (RBI) was back in action on Wednesday as the central bank intensified efforts to rein in the surging rupee which raced to a fresh 16-month high.

Here’s are top cues from domestic as well as international markets which could have a bearing on D-Street:

US Fed talks straight, raises interest rates by 25 basis points

Strong macroeconomic data gave confidence to the US Federal Reserve, which on expected lines, raised interest rates on Wednesday for the second time in three months by 25 basis points to a range of 0.75 percent to 1.00 percent.

The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

But, it looks like the US Fed is not in a hurry to increase interest rates which calmed investors’ nerves. The policy-setting committee expects that economic conditions will evolve in a manner that will warrant ‘gradual’ increases in the federal funds rate.

"A rate hike will hardly be a surprise with financial markets have long been pricing in such an eventuality," Anand James, Chief Market Strategist at Geojit Financial Services told Moneycontrol.com.

"Indian markets being at record peaks, there is certainly an element of vulnerability to correct, but what will hold markets in good stead would be the renewed market optimism towards policy continuation and more reform measures, given the recent electoral victory of the ruling party at the Centre," he said.

SGX Nifty signals breakout

The Nifty Futures on the Singapore Stock Exchange were trading 64 points higher at 9,174 indicating a flat-to-positive opening for the domestic market

Wall Street

The US markets ended higher after the US Federal Reserve on expected lines decided to increase rates by 25 bps for the second time in three months.

Markets had already factored in a rate hike of 25 bps as there was more than 90 percent chance of a quarter-point rate increase, according to federal funds futures.

The Dow Jones Industrial Average rose 112.73 points, or 0.54 percent, to 20,950.1, the S&P 500 gained 19.81 points, or 0.84 percent, to 2,385.26 and the Nasdaq Composite added 43.23 points, or 0.74 percent, to 5,900.05.

Technical View

The Nifty moved in a narrow band of 30 points and made a ‘doji’ kind of candlestick pattern for the second day in a row. But, there is another important pattern which traders should not overlook which is ‘inside bar’ or insider candle.

Inside bar is a two-candlestick pattern in which the inside bar is smaller or within the range of prior bar. Inside bars are common after a strong move and suggests consolidation, but it can also be formed at market turning points.

Traders can buy if Nifty trades above 9,122 levels at least for 30 minutes or to wait for a correction and buy the dip in the zone of 9,038-9,013.

Rupee

The rupee continued its winning run against the dollar to finish at a fresh 16-month high of 65.69 on Wednesday as exporters aggressively offloaded the US currency ahead of the Fed meet outcome.

Massive capital inflows are expected to pour in from foreign institutional investors (FIIs) on hopes of more reform measures following BJP's strong show in the recently-held state elections. The domestic currency has risen 2.23 percent since the beginning of the year.

US re-looks H-1B visa rules

IT stocks will be in a happy place as the United States may take longer than expected earlier to tighten laws for overseas professionals in the country, White House press secretary Sean Spicer has indicated, offering hope to Indian companies that they may be able to benefit from the existing H-1B visa policy.

The immigration reform bill, ‘Protect and Grow American Jobs Act’, is aimed at ensuring that US based companies consider American workers before hiring foreign workers who are currently employed at lower wages.

DA hiked by 2% from Jan 2017

The government plans to put more money in the hands of people which effectively boosts consumption. The Union Cabinet on Wednesday approved a 2 percent hike in dearness allowance (DA) and dearness relief to 4% from January 1, 2017, benefiting 48.85 central government employees and 55.51 lakh pensioners

SBI plans to raise capital

Shares of State Bank of India (SBI), will be in focus after the country's biggest lender by assets, said that its board had approved a plan to raise up to Rs 15,000 crore from capital markets in the next fiscal year starting from April 1.

US crude edged higher in a week

Crude oil went up slightly, but thankfully they are not boiling. Oil prices on Wednesday climbed for the first time in more than a week on a surprise drawdown in US crude inventories.

It received a boost after data from the International Energy Agency (IEA) suggested that OPEC cuts could create a crude deficit in the first half of 2017.

Brent futures gained 89 cents, or 1.8 percent to settle at $51.81 a barrel, their first increase in seven days. The global benchmark on Tuesday settled at its lowest level since November 30.

Vodafone nearing a deal to merge Indian unit with Idea

Shares of Idea which went up by nearly 10 percent. Long buildup was seen on the counter as the volumes rose by nearly 200 percent compared to Wednesday and OI increased marginally by 0.01 percent.

Bloomberg said that Vodafone Group was nearing an initial agreement to merge its Indian operations with Idea Cellular Ltd in a deal that would create the largest telecom company in one of the world’s most competitive markets, quoting people with knowledge

of the matter.

“The two firms plan to announce a preliminary agreement as soon as this month, according to the people, who asked not to be identified because the information is private,” it said.
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