Investors will look past the well-telegraphed announcement of the tapering of the US Federal Reserve’s bond-buying program on Wednesday. While the Fed kept interest rates unchanged, it said that it will reduce its $120-billion bond buying exercise by $15 billion every month starting mid-November.
US equities took the announcement in their stride and ended at record closing highs for the fourth successive session. Meanwhile, most Asian equities also closed in the green earlier in the day.
Some market participants said that with the event of the tapering announcement out of the way, foreign investors may warm up to Indian equities once again after being net sellers in recent months.
The Nifty50’s November futures contract traded on the Singapore Exchange were up 0.4 per cent or 69.1 points at 17,916.2 points suggesting that local equities could start the auspicious Muhurat trading session on a positive note.
The mood on the Street will also be lifted by the government’s decision to reduce excise duty on petrol and diesel by Rs. 5 per litre and Rs. 10 per litre, respectively. The move is expected to provide a further catalyst to demand during the festive period heading into the New Year as well as ease concerns over rising inflation.
“Finally, the fuel tax cuts should reduce the burden on monetary policy, at the margin but, with inflationary pressures broadening amid the continued growth recovery, we expect policy normalisation to continue,” said brokerage firm Nomura Financial Advisory and Securities India in a note.
Rahul Sharma, co-founder, Equity99 said that 17,765 points will act as crucial support for Nifty on breaking which we might see 17,725 levels. On the upside, he sees resistance at 17,880 points and if that is broken then the benchmark could again hit the 18,000 mark.
Shares of Bharti Airtel will be in focus as analysts were largely positive on the stock following the company’s post-earnings conference call on Wednesday. Brokerage firm Nomura India reiterated its buy call on the stock and said that subscriber addition was a key positive for the company.
Shares of metals, real estate and chemical sectors are likely to find favour with investors who will be looking to make token trades during the auspicious session.
