Markets may open with modest gains tracking positive Asian cues

Indian markets are expected to open the session with modest gains as cues from Asian peers are positive. The US Fed has decided to hold the rates, but opened the door to a potential rate cut sometime in the future. It would be interesting to see if the markets hold the gains throughout the day or rallies will be used by market participants to exit the stocks. At the time of writing, the SGX Nifty was trading at 11,754 level, up by 35 points.

A majority of Asian markets are trading in the positive terrain on Thursday after the US Fed left rates on hold overnight, but said the uncertainties on economic outlook could force its hand for a rate cut. The Japanese stock index Nikkei 225 gained 0.37 per cent, Hong Kong’s Hang Seng has moved higher by 0.41 per cent and the Kospi was up by 0.04 per  cent.

Back home, after a jubilant start to the day, the key equity benchmark indices were seen cruising along nicely. But there was a twist in the tale as in the second half of the trading session volatility kicked in and the markets erased all of its early gains to enter into negative territory. However, in the end, some recovery was seen, with the Nifty settling the day almost unchanged and the BSE Sensex adding 66 points to close at 39,113. The selling pressure was intense in the broader market indices with Nifty Midcap and Smallcap plunging 1.07 per cent and 1.83 per cent, respectively. The sectoral indices exhibited mixed trend with Nifty Realty and Nifty Metal being the top gainers, while Nifty Pharma and Nifty Auto being the top losers.

The US stocks settled with modest gains on Wednesday after the Federal Reserve left rates on hold. The Fed displayed a shift in language removing the ‘patience’ language from its statement, firming expectations that any future move by the central bank would be a rate cut. The Dow gained 0.2 per cent, S&P 500 advanced 0.3 per cent and the tech-heavy Nasdaq surged 0.4 per cent.

The European markets were mixed on Wednesday. Germany’s DAX slipped 0.19 per cent, UK’s FTSE 100 declined 0.53 per cent, while France’s CAC 40 index added 0.16 per cent.