INSUBCONTINENT EXCLUSIVE:
going slow on rate increases after an impending hike this week.
The Sensex ended the session at 60,746, gaining 786 points, or 1.3 per
cent, the highest close since January 18, while the Nifty gained 225 points, or 1.27 per cent, to close at 18,012
The Sensex ended above 60,000 and the Nifty above 18,000 for the first time since September 14.
In October, the Sensex gained 5.7 per cent
softening rate cycle made FPIs turn net buyers in October after selling shares worth Rs 13,405 crore in September
Foreign investors bought shares worth Rs 4,178 crore on Monday, according to provisional figures from the exchanges
FPIs bought shares worth Rs 5,692 crore in October
Investors expect the Fed to soften its stance from hereon, though the US central bank may raise rates by 75 basis points (bps) for fourth
successive time this week.
The strength of the US economy, which is indicating a lower probability of an immediate recession, and hopes
that inflation is plateauing, is raising bets in favour of a dovish stance by the Fed.
The US Gross Domestic Product (GDP), released last
week, showed that the US economy rebounded 2.6 per cent in the July-September period following two quarters of contraction.
The decline in
crude oil prices further boosted investor sentiment
Brent crude ended the session at $93.4, a decline of 1.7 per cent as weak economic data from China fuelled concerns about energy
demand.
Despite optimism, investors continue to be concerned about rate hikes as inflation and economic distress continue to be a global
challenge.
The Eurozone inflation surged to an all-time high with consumer prices rising 10.7 per cent in October.
"The data is mixed,
but markets seem to focus on the hope that the Fed will stop hiking after the rates reach 5 per cent," said Andrew Holland, chief executive
officer (CEO), Avendus Capital Alternate Strategies.
Apart from the Fed, the Reserve Bank of Australia and the Bank of England will
announce their monetary policy decisions this week
Investors will also be tracking US nonfarm payrolls, and unemployment data
cues, is helping the markets to maintain the recovery
We expect the Nifty to regain momentum above the 18,100 level
vice-president, research, Religare Broking.
