Markets trade flat as Janet Yellen hints more rate hikes


Benchmark indices opened marginally lower but later pared losses to turn flat tracking strong Asian markets after the US Federal Reserve Chair Janet Yellen hinted at a likely rate hike in the forthcoming policy review.

At 9:17 am, the S&P BSE Sensex was trading at 28,356, up 17 points, while the broader Nifty50 was ruling at 8,798, up 7 points.

In the broader market, BSE Midcap and BSE Smallcap gained 0.07% and 0.08% respectively.

“Nifty is well placed above the 8,770 levels indicates strength and has a potential to test 8,840- 8,870 levels in coming trading sessions,” said Nirmal Bang research in a technical note.

On Tuesday, foreign portfolio investors (FPIs) sold shares worth a net Rs 6.45 crore, while Domestic institutional investors (DIIs) also sold shares worth a net Rs 3.20 crore, provisional data available with BSE showed.

Sectors and Stocks

GAIL, ONGC, RIL and HDFC Bank were top gainers while Tata Motors, NTPC and Infosys were the top losers.

Tata Motors fell around 8% on poor Q3 results. The company’s net consolidated profit fell 96% year-on-year to Rs 112 crore, impacted by big loss in domestic business and operational weakness in JLR.

MTNL fell 3% on widening of its standalone net loss at Rs 819.96 crore, surpassing its total revenue, during the three-month period ended December 31, hit by increase in finance cost. The company had posted a net loss of Rs 671.59 crore in the same period a year ago.

Fed likely to hike interest rate

Federal Reserve Chair Janet Yellen on Tuesday said more interest-rate increases will be appropriate if the economy meets the central bank’s outlook of gradually rising inflation and tightening labour markets. Delaying rate hikes could leave the Fed’s policymaking committee behind the curve and eventually lead it to hike rates quickly, which Yellen believes could cause a recession.

“At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” she told the Senate Banking Committee in prepared remarks Tuesday.

Global Markets

Asian stocks rose early on Wednesday as Wall Street set record highs overnight after Federal Reserve Chair Janet Yellen spoke in support of an interest rate hike next month, while the dollar hovered near three-week highs.

Yellen said on Tuesday that the Fed will probably need to raise interest rates at an upcoming meeting in March, and that delaying rate increases could leave the Fed’s policymaking committee behind the curve.

Yellen’s comments boosted US bank stocks, helping push Wall Street indexes to record highs overnight.

The rise in US stocks nudged MSCI’s broadest index of Asia-Pacific shares outside Japan to a 19-month high. The index was up 0.3% early on Wednesday.

Japan’s Nikkei added 1% and Australian stocks rose 0.9%.

In overnight trade, the Dow Jones Industrial Average advanced 0.45% to close at 20,504.41. The S&P500 index rose 0.40% and Nasdaq Composite added 0.32%.