Share Market: Bank Nifty Hits New High

Share Market: BSE Sensex and NSE Nifty start the day’s session higher amid positive global cues. Nifty trades higher 0.35% at 18,666, as Sensex is add over 150 points to trade at 62,697. The Bank Nifty index hits a fresh record high for the second consecutive session, tops the 44,000 level, with constituents AU Bank and Kotak Bank leading the gains.

The CPI inflation in the US which came at 7.1 % YoY and only 0.1% MoM confirms the market expectation that the Fed will hike rate by only 50bp today. The consensus terminal Fed fund rate is now slightly below 5%, which is market positive. However, since recession in the US in 2023 is a high probability event, the market is unlikely to surge. In India, the bank index, and within the bank index the PSU bank segment, is the strongest segment and this can continue to remain resilient.

The broader market trades largely in the green, while Nifty IT recoups some losses to lead the sectorial indices in terms of gains. After four consecutive hikes of 75 basis points, the market is expecting Fed Chair Jerome Powell to moderate the pace of hikes to 50 bps amid early signs of moderation in inflation.

Also read: US Inflation Slowed Sharply

The outcome of the two-day meeting of the Federal Open Market Committee (FOMC)’s last meeting of 2022, would be known this midnight. “Any upside surprises to the November US CPI inflation print, due just before the FOMC, would trigger a more hawkish bias to the Fed Chairs’ statement in the press conference. The robust labour market and other activity indicators continue to point towards a possibility of a higher terminal Fed rate in the coming FOMC,” Kotak Mahindra Bank said in a note.

Gold rate was positive on Wednesday as traders await rate hike decision from the US Fed, while silver rate was up 0.36%. On Multi Commodity Exchange, gold February futures were trading at Rs 54,848 per 10 grams, up Rs 105 or 0.19%. Silver March futures were trading Rs 245 higher at Rs 69,020 per kg on MCX topping the 69,000 level.

Asia-Pacific markets traded higher on Wednesday, tracking gains in Wall Street indices. Japan’s Nikkei 225 gained 0.26% while the Topix was 0.24% higher. South Korea’s Kospi also rose 0.7%.