by Sensex/Nifty Rally Built on Flimsy Foundation of Fed Decision Uncertainty
Mumbai India’s equity benchmarks are expected to open higher Monday, extending Friday’s gains after the Reserve Bank of India lowered interest rates by 25 basis points and injected approximately $16 billion in banking liquiditya bold move that signals confidence in India’s economy and complete ignorance of what the Federal Reserve might do this week.
The RBI’s dovish pivot boosted sentiment, with the Nifty 50 closing at 26,186.45 Friday after domestic institutional investors bought ?41.89 billion in shares. Foreign investors, displaying the attention span of goldfish during feeding time, sold $48.81 million worth.
“Markets are rallying on the rate cut,” analysts confirmed, “and will immediately reverse course the moment the Fed announces anything that sounds remotely hawkish.” The Gift Nifty futures trading at 26,321.5 suggest the opening will be marginally positiveassuming nothing dramatic happens overnight, which is approximately a 40% probability in current market conditions.
The US Federal Reserve’s decision is the major factor dictating trends in domestic markets, which is another way of saying “Delhi has surrendered control of its equity markets to Washington.”
The Sensex surged over 500 points, Nifty gained 150 points, and both indices now trade at record highsa feat investors should enjoy for approximately three hours or until global sentiment shifts.
See what happens when your market depends entirely on foreign central banks at Bohiney Magazine’s market analysis.
SOURCE: https://bohiney.com
SOURCE: Bohiney.com ()
