Sensex, Nifty surge despite US Fed’s hawkish stance on interest rate hikes

MUMBAI:  India’s equity market indices ended with minor gains on Wednesday despite making a negative opening after US Federal Reserve Chair Jerome Powell stated that the central bank will need to raise interest rates for a longer period to control inflation.

The 30-share BSE Sensex surged 124 points or 0.21% to settle at 60,348. The broader NSE Nifty50 rose 43 points or 0.24% to end at 17,754. Adani Enterprises and Adani Ports led the Nifty pack’s gains on Wednesday, jumping 5% in the session, followed by ITC, L&T, Bajaj Auto, Tata Consumer and Tata Steel. The major laggards in the Nifty50 pack were Bajaj Finance, Infosys and Sun Pharma. 

“The global market has fallen back into the grip of uncertainty as the Fed chief signalled the possibility of a prolonged and faster rate hike, contradicting a dovish comment by another Fed official last week,” said Vinod Nair, head of research, Geogit Financial Services.  “The market now anticipates a 50 bps rate hike, which has pushed the dollar index to a three-month high. However, a strong recovery was seen in the domestic market towards the end of the day, which kept the bulls on the move,” he added.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said: “We are of the view that as long as the index is trading above 17700 or 20-day SMA (simple moving average), the uptrend formation is likely to continue.”