Sensex, Nifty Open in Green As Fed Keeps Rates Steady; Banking, Financials Lead
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Equity benchmark indices rebounded in early trade on Thursday amid optimistic investors’ sentiment boosted by a record high GST collections in April and foreign fund inflows. The 30-share BSE Sensex climbed 204.88 points to 74,687.66 in early trade. The NSE Nifty went up by 57.35 points to 22,662.20. From the Sensex basket, Power Grid, Mahindra & Mahindra, Asian Paints, Tata Steel, Sun Pharma and HDFC Bank were among the major gainers. Kotak Mahindra Bank, Maruti, Wipro and Titan were among the laggards.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said “As trading for May begins there are mixed cues for the market, but broadly positives outweigh negatives. The Fed commentary is cautious:” We are prepared to maintain the current target for the Fed funds rate as long as it is appropriate. We are also prepared to respond to unexpected weakening of the labour market.” Powell’s remark that “a rate increase is unlikely” is regarded by the market as dovish. Anyway, it is certain that the number of rate cuts this year, if at all that happens, will be far lower than initially expected. This is a headwind for global equity markets.
“The domestic cues are strongly positive. The GST collection for April setting a record of Rs 2.1 trillion indicates a booming economy. India’s GDP is estimated to have grown by 7.6% in FY24 and is expected to continue the growth momentum with above 7% growth in FY25, too. It appears that the market is discounting India’s growth outperformance. In April while the S&P 500 is down by 4.2%, Nifty is up by 0.7%. This outperformance can continue. The sharp 5% decline in crude triggered by expectation of a ceasefire in East Asia, is negative for ONGC and positive for tyres, paints and adhesives which use petroleum as inputs,” he added.
