News

Published: Apr 20, 2023
Updated: Apr 20, 2023

Global markets cautious as US Fed rate hike speculation looms

Global market sentiments are cautious as investors anticipate a potential rate hike from the US Federal Reserve. The US stock market is currently trading cautiously, with two out of three major indices closing in the red zone. The Dow Jones lost 0.23%, the S&P 500 index went down 0.01%, and the Nasdaq added 0.03%. The SGX Nifty also opened higher but has been trading within a tight 80-point range, indicating a choppy session in the Indian stock market.

US Dollar and INR exchange rate

The US dollar remains strong, with the Dollar Index sustaining above 101 levels after hitting a one-year low of 100.80 levels. Market experts expect the Indian Rupee to trade with a negative bias due to risk aversion in global markets and a recovery in the greenback. Sharekhan at BNP Paribas's Research Analyst, Anuj Choudhary, predicts that the USDINR spot price will trade in the range of ₹81.70 to ₹82.80 in the near term.

Global market triggers impacting Indian stock market

The global market is anticipating a rate hike from the US Federal Reserve, which has caused investors to become cautious. Deepak Jasani, Head of Retail Research at HDFC Securities, stated that global stocks drooped in cautious trade on Wednesday. This was due to expectations of an imminent peak in the Federal Reserve's interest rate cycle edging ahead of US banking sector concerns. Additionally, a sticky inflation print in the UK brought price pressures back to the fore.

US Bond Yields and Crude Oil Price

In the Asian stock markets, the US bond yield for ten years corrected 0.15% to 3.597 levels, and the US 30-year bond yield surged 0.03% to 3.790 levels. Crude oil prices also slipped below $80 per barrel in early morning sessions, losing around 0.30% from its previous close. WTI crude oil price is currently quoting around $78.75 per barrel, while Brent crude oil price is quoting $82.62 per barrel.

Rate hike fears cause volatility in markets

The global market is currently cautious due to speculation of a potential rate hike from the US Federal Reserve. This has resulted in the US stock market trading cautiously, with two out of three major indices closing in the red zone. Furthermore, market experts predict a negative bias in the INR exchange rate due to risk aversion in global markets and a recovery in the greenback. Crude oil prices and US bond yields are also fluctuating in the Asian stock markets, impacting global market sentiments