InvestorQ : What is your trading view for stock markets on Thursday 17th June and what impact you see of the Fed statement?
Debbie Mascarenhas made post

What is your trading view for stock markets on Thursday 17th June and what impact you see of the Fed statement?

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diksha shah answered.
3 months ago
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Ahead of the Fed policy statement on Wednesday, the Nifty corrected over 100 points on concerns that the Fed would hint at tightening of rates and tapering of the bond buying program. That prophecy came true as the Fed did hint that two rate hikes were very likely by the end of 2023. That is likely to keep markets under pressure.

On the subject of the Fed policy, while the medium term impact of the Fed decision is likely to be limited, you can look for some negative impact in the short term. A spike in 10-year bond yields could put pressure on rate sensitive stocks. However, this could be more pronounced on stocks that rallied sharply. Overall, higher growth impulses are a positive.

Foreign investors have been treading cautiously in the last few days. On Wednesday, the FPI action was negative with net selling of Rs.870 crore even as domestic institutions sold stocks worth Rs.874 crore. There was also some selling in focus stocks after the recent fiasco surrounding the Adani group of stocks during the week.

On Wednesday, global markets reacted as anticipated to the Fed statement. While NASDAQ was relatively subdued by just 24 bps, Dow Jones bore the brunt of the Fed policy ending 77 bps lower. European markets were largely mixed on Wednesday but SGX Nifty is trading nearly 60 bps lower in early trades and most of Asia including Japan are in the negative.

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