Sensex, Nifty seen as bets on the ease of rising rates

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(RTTNews) – Indian stocks are expected to open a bit higher on Friday as the odds of the Federal Reserve opting for a 100 basis point rate hike at the next policy meeting remain very low.

Amid growing signs of a recession, two Fed officials indicated on Thursday that they favored a 75 basis point rate hike at the July 26-27 meeting.

Underlying sentiment, however, could remain cautious on fears that the central bank’s inflation-fighting measures could trigger a recession.

Worries over China’s housing crisis and weaker-than-expected profits from major US banks could also keep investors at bay heading into the weekend.

Meanwhile, India’s merchandise exports jumped 23.52% year-on-year in June to $40.13 billion, while the trade deficit hit a record $26.18 billion. due to a 57.55% increase in imports, according to official data.

Benchmarks Sensex and the Nifty ended a choppy session down about 0.2% each on Thursday, extending losses for the fourth straight day. The rupiah slipped to a low of 79.92 before closing at 79.88 against the dollar.

Asian markets traded mixed this morning as Q2 GDP data from China fell short of expectations, but retail sales beat estimates.

The dollar was on track to post its third weekly gain as Brent futures held below $100 a barrel on demand concerns. Gold hovered around $1,700 an ounce after hitting a one-year low overnight.

U.S. stocks soared well past their worst levels of the day on Thursday but still ended broadly lower, reflecting disappointing results from financial giants JPMorgan Chase and Morgan Stanley.

A key measure of U.S. wholesale and business prices rose more than expected in June and new jobless claims hit an eight-month high last week, adding to fears of a possible recession.

The Dow Jones ended down half a percent and the S&P 500 edged down 0.3 percent while the tech-heavy Nasdaq Composite ended on a flat note.

European stocks fell sharply on Thursday as the EU cut its growth forecast and predicted inflation will be even stronger than expected.

The pan-European Stoxx 600 index fell 1.5%. The German DAX fell 1.9%, the French CAC 40 index lost 1.4% and the British FTSE 100 lost 1.6%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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