InvestorQ : What is your stock market outlook for trading on 23rd September, Thursday. Do you see the Fed statement having positive impact?
Dia Deshpande made post

What is your stock market outlook for trading on 23rd September, Thursday. Do you see the Fed statement having positive impact?

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diksha shah answered.
3 months ago
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On 22 Sep, the Federal Open Markets Committee or FOMC did not say anything hawkish about tapering and rates in its statement. Even in his address, Jerome Powell kept his tone restrained and did not commit on any action. Clearly, the Fed was keeping an escape route ready, especially with the current Evergrande imbroglio going on in China.

In a way, the uncertainty surrounding the global markets has resulted in the Fed being more cautious. They have avoided any time lines but the taper stays for now and rates are unlikely to be tampered till the time labour data also catches up. That is likely to be positive, especially for the financials and the metal stocks.

On Wednesday, the FIIs sold around Rs.1,943 crore in equities which was offset by the domestic buying of Rs.1,850 crore. However, global markets are showing robustness. Dow and Nasdaq are up nearly 100 bps while Europe was up 140 bps on Wednesday. Even the SGX Nifty is up by nearly 68 bps in early trades, thanks to the Fed neutrality.

The Fed neutrality has come as a big boost to the markets. Traders can expect sectors like banks, metals and other cyclicals to do well on hopes that rates will remain tepid for now. Even the bond yield action in the US shows that not much is likely to change in the short run. That is good news for the sustainability of the markets.

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