Indian stock indices extend gains, Sensex up 1 pc in early trade
The domestic equity market closed at its highest level in seven weeks, marking its best week since February 2021
New Delhi: Indian stock indices extended their gains from the previous session. In early trade on Thursday, Sensex and Nifty traded around 1.0 per cent higher from the previous close.
Today’s rise was witnessed despite the 75 basis points policy rate hike by the United States Federal Reserve to tame an over four-decade high inflation. Indian equity markets recorded their best weekly performance during the past week, supported by renewed buying, especially in banking and Information Technology stocks as well as the return of foreign investments into the Indian markets after months.
The domestic equity market closed at its highest level in seven weeks, marking its best week since February 2021. Sensex and Nifty during the week rose around 3-4 per cent on a cumulative basis.
Other Asian markets too trade on a positive note as investors followed the US Federal Reserve’s decision to raise rates to fight inflation, a move that was widely expected, said Mohit Nigam, Head – PMS, Hem Securities.
In the backdrop of an over four-decade high inflation, the United States Federal Open Market Committee has raised its key policy interest rate by 75 basis points to 2.25-2.50 per cent, anticipating that the increase in the interest rates will be “appropriate”. Hiking interest rates typically cool demand in the economy, thereby putting a brake on the inflation rate.
The United States Federal Reserve in its June meeting too raised the interest rate by 75 basis points, which was the steepest hike since 1994. The inflation rate in the US came in at 9.1 per cent in June, the highest since the early 1980s.
“IT stocks after the recent correction may rebound taking cues from the Nasdaq rally and the continuing strength of the US economy. Financials will continue to be resilient,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.