Sensex & Nifty poised for a firm opening after US Fed hikes interest rates

Key domestic equity benchmark indices, the Sensex & Nifty, in all probability will maintain their upward bias and open on a firm note Thursday, mirroring the trend seen in other Asian markets after the US Federal Reserve, on expected lines, raised interest rates from record lows. [caption id=“attachment_2548890” align=“alignleft” width=“380”]  Reuters[/caption] The central bank said in a statement after its latest meeting that it was lifting its key rate by a quarter-point to a range of 0.25 percent to 0.5 percent, and also suggested that rates would remain historically low in future in view of the sluggish global economic activity. “To keep the economy moving along the growth path it is on … we would like to avoid a situation where we have left so much (monetary) accommodation in place for so long we have to tighten abruptly,” Fed chair Janet Yellen said. The rate hike move, which was in anticipation for nearly a year now, was priced in by the markets across the globe, resulting in key US equity gauges rising over 1-1.15 percent in overnight trades. Similarly, major Asian gauges such as Japan’s Nikkei surged 2.2 percent, while China’s Hang Seng and Shanghai Composite in a steady move were up around 0.7 percent. In the run-up to the US Fed rate hike decision, the 30-share benchmark Sensex has been steadily gaining momentum, rising 450 points in last three sessions. On Wednesday, the index rose 174 points to close at 25,494.37, while CNX Nifty gained 50 points to end at 7,750.90. “In fact, the rate hike should be seen as a positive move as improving US economy in a sluggish global economic activity is a positive sign. With the US rate hike now behind us, foreign investors may resume fund infusion in Indian markets, as the country continues to remain a strong growth story given the worries of a global deflation,” said G.Chokkalingam, founder & managing director, Equinomics Research & Advisory. However, according to analysts the rate hike move would spell more trouble for commodities, already reeling under falling demand and sliding prices.