Developed economies are doing little better so that is also helping the market sentiment. The economic picture is favourable wherever you look.
The S&P BSE Sensex came under pressure after the minutes released from Federal Reserve overnight indicated that it could change its bond investment policy this year.
This brings them more in line with broader market consensus, although they are still on the dovish end of the spectrum and reckon that rates will rise no higher than 1.625 percent until at least the end of next year.
"Indian markets (are) well placed to absorb the US Fed rate hike. Gradual approach in future increases augurs well for emerging markets," Economic Affairs Secretary Shaktikanta Das tweeted.
The Fed increased the interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent on strong macroeconomic data and confidence in inflation which is rising to central bank’s target.
The move, widely anticipated by financial markets, takes the overnight funds rate to a target range of 0.75 percent to 1 percent and sets the Fed on a likely path of regular hikes ahead.
We expect the USD-INR pair to trade in a range of 66.60-66.90/dollar today, says Ashutosh Raina of HDFC Bank.
The FOMC unanimously approved a quarter-point hike that pushed the target range for its short-term lending rate to between 0.5 percent and 0.75 percent, and indicated a somewhat more aggressive path forward.
The Dow Jones industrial average briefly rose more than 50 points to hit a new record high, before trading about 70 points lower. The Nasdaq and S&P 500 both gained around 0.1 percent before holding 0.5 percent and 0.58 percent lower, respectively.
Equity benchmarks recovered from day's lows but remained rangebound as investors awaited the decision of Federal Reserve policy meeting due tonight. More than 95 percent economists expect 25 basis points rate hike but the most important factors to watch out for would be its outlook on US economy, inflation and further rate hike.
Indian equities continued to trade in a tight range as investors awaited the decision of two-day Federal Reserve meeting due tonight. It is the first meeting of the FOMC after US elections.
Fed fund futures show a 97 percent probability that the Fed will lift rates by a quarter of a percentage point at the end of its two-day policy meeting on Wednesday, according to the CME Group.
Equity benchmarks remained directionless as investors maintained caution ahead of Federal Reserve's two-day policy meeting that will begin tonight.
We expect the pair to trade in the 67.80-68.50/dollar range ahead of the RBI policy decision and the all important FOMC meeting next week, says Ashutosh Raina of HDFC Bank.
Post demonetisation the market was expecting an earnings growth of 15 percent for this fiscal, which has now been toned down and one can look at mid single digit growth for FY17, says Hemant Kanawala, Head of Equity at Kotak Life Insurance.
The forex market sentiment turned highly fragile due to consistent unwinding by foreign investors against the backdrop of demonetisation as well as renewed Fed rate hike fears.
Speaking to CNBC-TV18 Tanvee Gupta Jain of Macquarie Capital Securities said that there could be short-term pain in the next couple of quarters owing to a dip in consumer discretionary spends.
Qi Gao, FX Strategist at Scotiabank tells CNBC-TV18 the strengthening of US dollar versus emerging market currencies is due to Trump's pro-growth stance. Trump's promise to accelerate fiscal spending on infrastructure has raised inflation expectations which means possibility of rate hikes, Gao says.
According to the global financial services major, CPI inflation is likely to slide further to sub-4 percent print by November-December before firming towards 4.5 percent by March 2017.
Speaking to CNBC-TV18 Geoff Lewis of Manulife Asset Management said that markets are in a wait-and-see mode. He sees no reason for major volatility.
The Indian rupee has bounced back on Friday. It has opened at 66.84 a dollar, higher by 9 paise compared with 66.93 a dollar in previous session.
USD-INR is expected to open around 66.85 today and then settle in a range of 66.70 to 67, says Mohan Shenoi.
Amid discussion around the upcoming US election and fluctuation in the oil price, the US Federal Reserve is back on the table with the minutes from its September meeting, due at 2.00 p.m. ET.
Nischal Maheshwari of Edelweiss Securities believes valuations are currently stretched and global events lined up over the next few months like US Presidential elections, Federal Open Market Committee (FOMC) meetings, among others could prove to be impediments for markets to hit new highs soon.