Market Live: Sensex, Nifty flat in opening after investors digest Fed rate hike

10.07 am Market Check: The broader markets outperformed equity benchmarks after Federal Reserve hiked interest rate by 25 basis points to 1.25 percent, which was on expected lines.

The 30-share BSE Sensex was up 18.30 points at 31,174.21 and the 50-share NSE Nifty fell 12.25 points to 9,605.90.

The BSE Midcap index was up 0.2 percent and Smallcap gained 0.5 percent on positive market breadth. About 1,148 shares advanced against 713 declining shares on the BSE.

Aurobindo Pharma was top gainer among Nifty stocks, up 3.5 percent followed by NTPC, Adani Ports, Bharti Airtel, Dr Reddy’s Labs and Sun Pharma whereas GAIL, Coal India, Asian Paints, TCS, L&T, Bank of Baroda and BPCL were under pressure.

9:59 am Market Outlook: The Federal Open Market Committee (FOMC), the policy making arm of the US Federal Reserve, hiked its rates on expected lines, by 25 basis points.

The FOMC also said that it will begin reducing its USD 4.5 trillion balance sheet this year.

VK sharma, Head – Private Client Group, HDFC Securities feels the US Fed statement is apparently hawkish.

While the FOMC has laid out a plan to reduce its balance sheet size, it has not said when they would begin reducing the balance sheet, Sharma said.

The yields on the 10-year have risen yesterday in the US. Crude has fallen afresh. This should further help Indian markets, he feels.

9:45 am Stake sale: Shipping Corporation of India shares hit a 52-week high of Rs 92, up as much as 16 percent in morning trade after NITI Aayog recommended the government to cut stake in the company by 38.75 percent.

The NITI Aayog has drafted a recommendation which proposes to bring down the government’s stake in the company to 25 percent from current 63.75 percent. The deal could potentially earn the government around Rs 960 crore for the exchequer.

The recommendation will soon be sent to cabinet committee of economic affairs.

NITI Aayog has recommended the Ministry of Shipping to divest stake in SCI in multiple tranches.

Government should sell 26 percent stake in SCI in first round and subsequently, government should transfer management control, it said in its draft.

9:30 am FII View: Mahesh Nandurkar of CLSA said analysis of agri stress indicates that Tamil Nadu, Karnataka and Haryana may follow up with farm loan waivers, taking the total farm loan waivers to about USD 28 billion from USD 10 billion.

Assuming these are staggered over five years, the annual rise in consolidated fiscal deficit works out to 25 bps of GDP. Else, other developmental expenditure would be compromised, potentially softening a capex cycle upturn, he added.

He feels this would dampen investor sentiment on PSU banks and NBFCs.

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9:15 am Market Check: Equity benchmarks started off trade on a flat note again, as investors digested 25 basis points rate hike by Federal Reserve in its latest policy meeting.

The 30-share BSE Sensex was up 18.21 points at 31,174.12 and the 50-share NSE Nifty fell 7.65 points to 9,610.50.

Reliance Industries extended gains, up 0.75 percent on top of 3 percent rally in previous session.

Adani Ports, ITC, Bharti Airtel, Tata Motors, Hero Motocorp and ONGC were others gainers while TCS, L&T, ICICI Bank, Infosys and HDFC were under pressure.

In midcap space, City Union Bank, PNB, IDBI Bank, Bhushan Steel, Balaji Telefilms and Prism Cement were down over a percent while Ginni Filaments surged nearly 12 percent. Emkay Global was up 5% and SPARC gained 4 percent.

Shipping Corporation of India rallied 12 percent on stake sale buzz.

Meanwhile, the Indian rupee opened marginally higher at 64.27 per dollar versus previous close of 64.30.

Mohan Shenoi of Kotak Mahindra Bank said as expected, US FOMC hiked the rate by 25 bps, hinting one more rate hike in 2017. As the event was already priced-in, global currency market reaction was muted.

He expects the rupee to trade in a range of 64-64.35/dollar today.
Asian equities turned cautious after the US Federal Reserve raised interest rates for the second time this year, as was widely expected by markets. Hong Kong’s Hang Seng and Australia’s ASX 200 slipped over a percent.