Nifty: Indices up 1% on slower Fed hike hopes

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Mumbai: Indian equities surged over 1% on Monday, snapping the three-day losing run, on hopes that the US Federal Reserve may go slow on interest rate increases following the weaker-than-expected economic readings later last week. Shares of information technology companies led upsides ahead of TCS’ December quarter results due after trading hours.

The Nifty crossed above the hurdle of 18,000, but the index must close above the 18,250 level for the rally to continue, said analysts.

Nifty rose 241.75 points or 1.35% to close at 18,101.20, while the BSE Sensex gained 846.94 points or 1.41% to close at 60,747.31.

“A decisive close above 18,260 levels in Nifty may result in further recovery, else the decline would resume,” said Ajit Mishra, vice president-technical research at

Broking.

The Nifty IT index gained 2.8% with TCS and

rising over 3% each.

Money managers are wary of concluding that the worst for the market is over.
“I am cautious on the market and I think it might be early to rejoice on positive US economic news,” said Andrew Holland, chief executive at Avendus Alternate Strategies. “While investors must accept that volatility will continue, they must also consider the rich market valuations before deploying fresh money into equities.”

US markets had jumped over 2% on Friday on data showing lower-than-expected jobs growth in December and the contraction of the country’s services industry activity during the month. The softer economic data has raised expectations that the US Federal Reserve’s rate actions in 2022 to control inflation might be bearing fruit. The market will now assess Fed Chairperson Jerome Powell’s speech at a conference in Stockholm on Tuesday and the US consumer inflation data on Thursday.

Back home, the NSE’s Midcap 150 index gained 0.8%, and the Smallcap 250 index advanced 0.4%.

Foreign portfolio investors (FPIs) were net sellers to the tune of ₹203 crore, while their domestic counterparts were buyers worth ₹1,724 crore on Monday, according to provisional data on BSE.

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