By Malvika Gurung
Investing.com -- Dalal Street witnessed a positive opening on Wednesday, following a softer-than-anticipated US CPI inflation print at 7.1% compared to Investing.com’s forecast of 7.3%.
As a result, Nifty50 and Sensex opened 0.3% higher, while the sectoral index Nifty Bank hit a new all-time high, surpassing the 44,000-mark in the session, as investors awaited the results of FOMC’s 2-day Dec policy meeting due later today.
In a note provided to Investing.com, Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that a lower-than-expected November CPI inflation in the US confirms the market expectation that the Fed will hike the rate by 50 bps on Wednesday.
“The consensus terminal Fed fund rate is now slightly below 5%, which is market positive. However, since recession in the US in 2023 is a high probability event, the market is unlikely to surge,” he stated.
Vijayakumar sees the bank index in India, especially the PSU bank segment as the strongest segment and expects it to continue remaining resilient. ‘HDFC twins exhibit strength,’ he notes.
The market expert pegs the recovery in the IT segment to have more steam left, with a resumption in FII buying termed as another positive.
“However, Nifty is unlikely to break out of the 18,400-18,800 range and sustain at higher levels. High valuations are likely to cap the rally,” Vijayakumar added.
On the USD/INR pair, Kunal Sodhani, Vice President, Global Trading Center, Shinhan Bank expects consolidation to continue between 82.30-82.85 levels. At the time of writing, the Indian rupee was trading at 82.62 against the greenback.
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