9:30 am FII view on India:
Among emerging markets (EMs), India is still attractive with some bottom-up stock opportunities, says Arvind Sanger of Geosphere Capital Management adding that EMs would have had marginal impact if the Fed had raised the interest rate. “RBI not raising rates would be a negative surprise considering inflation numbers,” Sanger says in an interview with CNBC-TV18.
He expects atleast 25 basis points (bps) cut in the monetary policy meet. The impending rate cut, he says, has already been priced in by the market. Certain equities present opportunities for sell-off currently, he says adding that exposure to Indian equities will improve once valuations are reasonable. The slow global growth is impacting Indian exports, he adds.
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Bouyed up by Federal Reserve’s decision, the market has opened with a bang on Friday. The Sensex is up 226.10 points or 0.9 percent at 26190.07 and the Nifty gains 68.30 points or 0.9 percent at 7967.45. About 420 shares have advanced, 63 shares declined, and 24 shares are unchanged.
Vedanta, ICICI Bank, Axis Bank , Infosys and Tata Steel are top gainers in the Sensex.
The Indian rupee opened at two-week high in early trade The currency gained by 31 paise at 66.15 per dollar against 66.46 Wednesday.
Pramit Brahmbhatt of Veracity said, “The rupee is expected to gain as dollar is trading weak against other major currencies. We see the range for the USD-INR between 66-67/dollar.”
The US dollar slumped after the US Federal Reserve held interest rates steady amid a slew of global challenges, and lowered its long-term outlook for the American economy.
The Federal Reserve held off raising rates, which would have ended a nearly 7-year-old zero interest rate policy. Investors have started trading with a new view of the Fed’s path to higher rates, and the promise of superlow rates for a little while longer. Odds have also risen that the Fed will now not hike rates until 2016, and RBS says the markets are currently pricing the first full rate rise for March but odds for December were still above 60 percent.
Fed Chair Janet Yellen, during a briefing, explained the central bank could still hike in October, but some forecasters see December as more likely.
Asian shares outside Japan mostly rebound early Friday, recovering from early losses after the Federal Reserve cited concerns about global economic growth in its decision to hold off on its first rate hike in nearly a decade.
Wall Street indexes gave up a 1-percent rally to end mostly lower overnight. The blue-chip Dow Jones Industrial Average and the S&P 500 slipped 0.4 and 0.3 percent respectively, while the Nasdaq Composite inched up 0.1 percent.