Live: US Fed taper scare is short-lived but mkt in no mood to rally

11:45 am The fall in rate sensitive stocks dragged the Sensex down by nearly 300 points from its intraday high of 21,017.45 after two central banksannouncedtheir policies on Wednesday. However, by mid-morning, the markets had more or lessstabilized.

While the BSE Sensex was down 0.72 percent at 20710, the NSE Nifty was down 0.77 percent at 6169.

In an interview to CNBC-TV18 Taher Badshah, Motilal Oswal Asset Management said the Fed taper impact will be short-lived for the market.

The US central bank on Wednesday started a long-awaited tapering of its asset-purchase program. It said it would cut its monthly stimulus by $10 billion to $75 billion from January and that interest rates would remain low for some time.

More from Investing

MSMEs are breaking the traditional convention. Look who’s funding them Scale-up your startup without an investor! Here’s how

Technical analyst Sudarshan Sukhani advised traders to close all long positions. “This is clearly not a market that is willing to go up. Whatever upside was there apparently was completed yesterday so that is the first step for protection of short-term traders. A rally in the market should now be used to create new short positions for January,” he told CNBC-TV18.

US Fed scares markets again, volatile Sensex dips even further

10:15 amBoth the Sensex and the Nifty weakened further after a gap up opening.

At 10:15 am, the BSE Sensex was down 0.81 percent at 20690 while the NSE Nifty was down 0.85 percent at 6164.

The rupee declined 33 paise to 62.42 against the US dollar as Federal Reserve started cutting monthly fiscal stimulus by $10 billion to $75 billion.

The Federal Reserve announced on Wednesday it would start to taper its aggressive bond-buying program to $75 billion a month beginning in January, propelling the market to a record close.

According to CNBC-TV18’s Udayan Mukherjee, there is not enough ammunition for the market to head very high from here. “It is likely to hover between 6,000-6,400,” he said.

Most market watchers are reading Fed’s move as bullish and it means that the US economy is going to do well and interest rates in the US won’t rise further. But one needs to see how this will impact the foreign liquidity inflow, which has been like mother’s milk for Indian market, he added.

Big Ben spooks markets; volatile Sensex opens up but slips into red

9:30 AM Indian markets opened in the green today but slipped into the red after theUS Federal Reserve decided to taper its stimulus program beginning January but decided to keep interest rates at historic lows on Wednesday.

Sensex opened 146 points at 21011 while the Nifty was up 41 points at 6255. However, after a huge gap-up open, markets turned tepidas investors try to make sense of what to factor in with the central banks decisions both locally and globally. Within the first five minutes of trade, the markets slipped into the red.

At 9:17 pm, the Sensex had slipped nearly 260 points from the opening high to 20803, while the Nifty slipped nearly 80 points from the opening high to 6196.

RIL, Wipro, ONGC, Coal India, Gail India, Tata Motors, ICICI Bank, HDFC, Hero MotoCorp, Maruti, Jindal Steel, Tata Steel, Mahindra & Mahindra, are among gainers in Sensex and Nifty. Infosys, TCS, Bharti Airtel, Bajaj Auto, HDFC Bank, Tata Power, Cipla, are among losers in Sensex and Nifty.

Teck, FMCG, Metal, PSU, Capital Goods and Consumer Durables, Realty, Oil and gas, Power indices are the losers.

“The market may see some profit booking as investors try to make sense of what to factor in with the central banks decisions both locally and globally. Earlier, global markets used to come tumbling down on fears of tapering. But that doesn’t seem to be happening now as the market views the current Fed developments as ‘dovish tapering’ and no quick end really for the stimulus programme,” said IIFL in a note.

Globally, US stocks staged an explosive rally on Wednesday, driving the Dow and the S&P 500 to all-time closing highs after the Federal Reserve announced it would start to unwind its historic stimulus.Starting Jan 201414, the Fed will buy $75 billion in bonds each month against $85 billion earlier. The Fed committee says it is determined to avoid inflation that is too low, as well as inflation that is too high.

8: 30 AM Global cues:Global markets gain on Fed policy

The US Federal Reserve has finally decidedto taper the stimulusprogramme from next month as it sees an improvement in the US economy. Starting in January, the Fed will spend $75 billion a month on bonds down from the $85 billion now.

Asian share markets rallied on Thursday as a Federal Reserve commitment to low rates offset a long-dreaded decision to taper stimulus, sending Wall Street to record heights and the dollar galloping above 104.00 yen for the first time since 2008. The broad-based slide in the yen was viewed as positive for Japanese exports and profits, and thus for the Nikkeiwhich climbed 1.7 percent to threaten its peak for this year.

[caption id=“attachment_1230907” align=“alignright” width=“380”]  Reuters[/caption]

The dollar was hoisted to a more than five-year high against the yen on Thursday after the Federal Reserve started to dial back its massive bond-buying stimulus, giving markets a strong signal that the U.S. economy was growing at a healthy clip.The dollar was a major beneficiary, surging to 104.15 yen while the euro toppled back to $1.3685.

U.S. stocks staged an explosive rally on Wednesday, driving the Dow and the S&P 500 to all-time closing highs after the Federal Reserve announced it would start to unwind its historic stimulus.The Dow Jones industrial averagesurged 292.71 points or 1.84 percent, to end at 16,167.97, a record closing high. The S&P 500gained 29.65 points or 1.66 percent, to finish at 1,810.65, also a record closing high. The Nasdaq Compositeclimbed 46.384 points or 1.15 percent, to close at 4,070.064.

Business/Stock news:

HDFC Bank Ltdfiled an application with the Foreign Investment Promotion Board seeking approval for increasing its foreign shareholding limit. The development comes after the RBI has said the foreign shareholding in the bank crossed the overall limit of 49%.

Financial Technologies (India) Ltd(FTIL) andMulti Commodity Exchange of India Ltd(MCX) will witness some action. The Securities and Exchange Board of India (Sebi) is set to restrain FTIL andJignesh Shahfrom holding any stake in equity bourseMCX Stock Exchange Ltdafter the commodities market regulator declared them not “fit and proper” to hold any management position in any exchange in India.

The Department of Telecom may bar operators holding 3G airwaves from sharing the high-speed spectrum. As per draft rules, “spectrum sharing will not be permitted among licences having 3G spectrum,” a DoT source said. Bharti Airtel , Vodafone, Idea Cellular , Reliance Communications , Tata Teleservices , BSNL, MTNL and Aircel hold 3G spectrum. S-Tel too had acquired 3G spectrum in 2010 but the company has now closed its operations in India.

Economy news:

The Reserve Bank of India kept talking tough on inflation despite unexpectedly holding its policy interest rate unchanged on Wednesday, saying it will be ready to act even if the country struggles to raise its low growth rate.

The RBI’s decision to keep the repo rate at 7.75 percent surprised investors, who had widely expected the central bank to hike the main lending rate after raising it by a quarter percentage point each at its previous reviews in September and October.