Markets surge to new high as US Fed rate hike fears ebb
PremiumMarkets scaled a record high on Thursday amid a gush of foreign liquidity and as investors continued to bet on economic revival with the gradual lifting of regional curbs
Markets scaled a record high on Thursday amid a gush of foreign liquidity and as investors continued to bet on economic revival with the gradual lifting of regional curbs. The BSE Sensex closed up 318.05 points or 0.58% higher at 54,843.98. The Nifty was at 16,364.40, up 82.15 points or 0.50%.
Equities in other parts of Asia-Pacific were mostly lower. Hong Kong’s Hang Seng index lost nearly 1%, the Nikkei 225 in Japan, and the Shanghai Composite in China fell around 0.2%. Worries about regulatory changes in China and the spread of the Delta variant of the coronavirus weighed on sentiment despite tame US inflation easing fears that the Federal Reserve would rush to reduce support.
US markets closed at record levels on Wednesday, after latest figures showed that the consumer price index rose 0.5% last month, after climbing 0.9% in June. The drop in month-on-month inflation rate was the largest in 15 months, easing concerns about the potential for runaway inflation. US consumer price increases slowed in July, data showed on Wednesday, although they remained at a 13-year high on a yearly basis.
“Global cues were mixed as positive sentiments on account of lower US inflation data and better-than-expected UK GDP (gross domestic product) numbers were somewhat spoiled by China’s regulatory crackdown on internet insurance companies," said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services Ltd.
“Equity markets are expected to continue with its positive momentum as economic activity is expected to further pick up pace with the further relaxation of lockdown measures. With earnings season being in the last leg, market would largely be tracking global cues for the direction. Post lower inflation data, investors are now awaiting US weekly jobless data as the recovery in the labour market is also an important parameter for Fed to decide on its tapering action," Khemka added.
The India volatility index or India VIX cooled off slightly on Thursday. It closed at 12.37, down 2.67% .
Binod Modi, head, strategy at Reliance Securities, said while concerns over global growth continue to persist due to a recent surge in cases of the Delta variant of coronavirus in several countries, the underlying strength of domestic market remains intact.
(Reuters contributed to this story.)
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