Indian equities rise as markets benefit from the US Fed’s interest rate pause
In response to the US central bank’s most recent monetary policy decision, which finally stopped the interest rate after rising it for more than a year, Indian market indexes moved higher on Friday morning.
The Sensex and Nifty indexes were each up 0.4% at the time this story was written. “The current market trend is being impacted by two things, one favourable and the other negative. The beneficial global signals are the contributing element. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “the mother market, the US, has brushed off the Fed’s ‘hawkish pause’ and has advanced.
In its most recent meeting on Wednesday, the monetary policy committee of the US Federal Reserve suspended the benchmark interest rate. The policy rate, which was close to zero during the COVID-19 outbreak, has been maintained at 5.0–5.25%.
With the exception of the most recent hiatus, the US central bank has increased interest rates for 10 consecutive months, which was necessary to combat skyrocketing inflation.
The fact that there are indications of a robust resurgence in the industrial sector is another important factor supporting Indian equities. With steady purchases being made by foreign portfolio investors and a promising prospect for development, the Indian market attitude has been favourable overall as inflation has continued to decline.
“A cycle that may last between four and five years is only getting started. This capex cycle will mostly benefit capital goods, says Vijayakumar.
