US markets closed higher on Friday and ended at record high levels after the Fed Chairman Jerome Powell indicated that the central bank could begin tapering by year end but did not give a firm timeline, boosting sentiments back home.
“Even though this (Fed chair speech) can be treated as the beginning of normalization of the accommodative policy, the communication is smart enough not only to calm the markets but to enthuse it too. This will enthuse the bulls in India too,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 9.18 am, BSE flagship Sensex was up 324 points or 0.58 per cent to 56,449. NSE benchmark Nifty rose 105 points or 0.63 per cent to 16,810.
In the 50-share pack Nifty,
was the biggest gainer, up 2.39 per cent. , Titan, , , JSW Steel, HDFC Life Insurance and M&M were among other gainers.
PowerGrid was the only loser in the pack, down 0.20 per cent.
FACTORS DRIVING MARKETS
Good news
Fed’s uncertain tone: Powell offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be “this year” and indicated it will remain cautious in any eventual decision to raise interest rates.
Dollar, yields down: The absence of a timetable for tapering caused US benchmark Treasuries and the dollar to slip, and both trends continued on Monday morning in Asia. The yield on benchmark 10-year Treasury notes was 1.3054 per cent compared with its US close of 1.312 per cent, and the dollar index, which measures the greenback against a basket of currencies, was around a two-week low.
Bad news
Macro data disappoints: Data on Friday showed US consumer spending slowed in July, while fears about the Covid-19 Delta variant knocked consumer sentiment to a more than 9-1/2-year low in August.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.86 per cent, while Nifty Midcap added 0.74 per cent. Broadest index on NSE, Nifty 500 was up 0.70 per cent.
CAMS, Alkyl Amines, National Aluminium, Bharat Forge, Jindal Steel and SAIL were gainers from the space, while Adani Total Gas, AU Small Finance Bank, Laurus Labs, Century Ply, Cyient and SpiceJet were under selling pressure.
Global markets
Japan’s Nikkei rose 0.9 per cent soon after the bell, and MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.32 per cent in early trading before Chinese markets had opened.
Australia climbed 0.39 per cent and Korea’s Kospi gained 0.54 per cent. US stock futures, the S&P 500 e-minis, barely moved, up 0.04 per cent.
