Pre-Open Points To Downtick At Start As Fed Rate Hike, NSE IPO Weigh

Mumbai, September 17: Indian shares edged down at pre open signalling a downtick at the start for benchmarks as Asian markets traded mixed after US Federal Reserve’s rate hike and indications of further tightening, while crude prices remained above $100 a barrel and the launch of the National Stock Exchange of India’s IPO today added to liquidity considerations for the secondary market.  

Nifty 50 declined 0.01% while Sensex declined 0.16% at pre open.  

Market participants will also turn their attention to the National Stock Exchange of India’s IPO, which opens for subscription on Thursday, adding to activity in the primary market, where it will be the fifth live issue.  

The exchange on Wednesday allotted shares worth Rs 6,746 crore to anchor investors, with Norway’s and Abu Dhabi’s sovereign wealth funds among the participants. The anchor allocation was priced at Rs 1,785 per share, the upper end of the IPO’s price band.  

Shares of domestic oil refiners, fuel retailers and upstream producers could be in focus after the government cut the windfall tax on exports of petrol, diesel and aviation turbine fuel.  

Shares of Asset Reconstruction Company are set to make their stock-market debut on Thursday, following a Rs 733 crore IPO that was subscribed more than 20 times last week.  

Alembic Pharma‘s shares will be watched after the US drug regulator issued an establishment inspection report for its bioequivalence facility in Vadodara. 

Asian Markets Mixed 

Asian equities traded mixed in early Thursday action as investors assessed the implications of the Fed’s latest policy decision. 

The MSCI Asia-Pacific index excluding Japan was down 0.01%, while Japan’s Nikkei edged up 0.07%. Hong Kong’s Hang Seng index fell 1%, while South Korea’s Kospi gained 0.2%. 

The Fed’s 25-basis-point rate increase was unanimous, while its updated projections showed 16 of 18 policymakers expecting at least one more 25-basis-point increase by the end of the year. Markets are also assessing the possibility of another rate move as early as October. 

The dollar strengthened after the Fed decision, touching a seven-week high against major currencies. Higher US short-term yields and expectations of further monetary tightening could weigh on emerging-market assets, including Indian equities, as elevated US rates can increase the appeal of dollar-denominated assets. 

Wall Street, US Futures 

US equities ended lower on Wednesday as investors digested the Fed’s rate decision and its guidance on the path of monetary policy. 

The Dow Jones Industrial Average fell 1.2%, while the S&P 500 declined 0.4%. The Nasdaq Composite slipped 0.01%. 

US stock futures, however, gained in Asian trading, providing some support to global risk sentiment ahead of the Indian market open. Nasdaq futures rose 0.6%, while S&P 500 futures gained 0.5%. 

The divergence between a weaker Wall Street close and firmer futures suggests investors are continuing to assess the impact of higher-for-longer US interest rates on equity valuations. 

Oil Prices Steady 

Crude oil prices were largely steady after reports that Saudi Arabia was offering additional crude cargoes through Oman, easing some concerns over supply disruptions linked to the conflict in the Middle East. 

Brent crude futures were flat at around $105.8 a barrel after settling 2.7% lower in the previous session. 

Despite the recent decline, oil remains above the $100-a-barrel mark, with restrictions around the Strait of Hormuz and continuing geopolitical tensions keeping supply risks in focus. 

For India, elevated crude prices remain a key concern given the country’s dependence on imported oil. Sustained high energy costs can add to inflationary pressures, weigh on the rupee and affect corporate margins. 

Source

• Exchanges