Market benchmark indices Sensex and Nifty were trading marginally higher in early trade on Thursday as crude oil prices eased slightly from their recent highs, although caution prevailed after the US Federal Reserve’s rate hike and indications of further tightening.
Foreign fund outflows and muted trend in Asian markets also capped the gains in the domestic equities during initial trading.
The 30-share BSE Sensex advanced 86.49 points to 74,422.94 in early trade. The 50-share NSE Nifty was up 50.1 points to 23,267.70.
Among the 30 Sensex firms, Eternal, Bajaj Finance, Bharat Electronics, Mahindra & Mahindra, Bajaj Finserv and InterGlobe Aviation were among the gainers.
HCL Tech, HDFC Bank, Tata Consultancy Services, Infosys and Tech Mahindra were among the laggards.
“While a pullback in Brent crude to around USD 104.7 a barrel from its recent high offers some marginal relief, the Federal Reserve’s rate hike and indication of further tightening could keep markets volatile and limit any immediate recovery.
“The Fed raised its policy rate by 25 basis points to 3.75-4 per cent, its first increase in three years, and projected another hike this year,” Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.
For India, higher US interest rates could strengthen the dollar, pressure the rupee and weigh on foreign investment flows into emerging markets, he added.
Brent crude, the global oil benchmark, traded 0.12 per cent lower at USD 105.7 per barrel.
The National Stock Exchange’s much-awaited Rs 22,569-crore IPO began for subscription on Thursday.
In Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 index quoted in positive territory, while Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index traded lower.
US markets ended lower on Wednesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,032.61 crore on Wednesday, according to exchange data.
On Wednesday, the Sensex climbed 332.63 points, or 0.45 per cent, to settle at 74,336.45. The Nifty was up 99 points, or 0.43 per cent, to end at 23,217.60.
-PTI
