Markets trade flat on Fed rate hike, Trump probe; Nifty below 9,600

Benchmark indices were trading flat in the noon deals tracking muted cues in global markets after US Federal Reserve raised policy rate for the second time this year and unveiled plans to shrink its balance sheet. Fed Chair Janet Yellen said the process could start "relatively soon", while projections of Federal Reserve Board members also showed they expect one more rate hike by the end of year. It also maintained forecast for one more hike in 2017.
 
Meanwhile, Sentiment also remained cautious after media reports that US President Donald Trump is being investigated by a special counsel for possible obstruction of justice and crude oil’s steep fall of about 3% to a seven-month low also added to the woes.
 
At 12:31 pm, the S&P BSE Sensex was trading at 31,134, down 20 points, while the broader Nifty50 was ruling at 9,594, down 23 points.
 
In broader market, S&P BSE Midcap was flat, down 0.05% while the S&P BSE Smallcap gained 0.1%.

Buzzing Stocks

Wipro, Reliance Industries, ONGC and Bharti Airtel gained the most on BSE Sensex while GAIL, Caol india, Asian Paints and TCS lost the most on the index. 

SpiceJet gained 3% on reports that it is likely to place an order for the Boeing 737 Max-10 planes at the aircraft’s debut at the Paris Air Show later this month, thus becoming one of its launch customers globally.

Central Bank of India fell 2% after Reserve Bank of India (RBI) put the bank under prompt corrective action in view of high net non-performing assets (NPA) and negative return on assets (RoA).

 
Fed raises rates
 
Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation.
 
Policymakers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5-trillion balance sheet this year.
 
“Near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington.
 
Policymakers also issued forecasts showing another three quarter-point rate increases in 2018, similar to the previous projections in March. READ MORE
 
Trump Probe
 
US President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice, the Washington Post reported on Wednesday, citing unidentified officials.
 
Mueller is investigating alleged Russian interference in the 2016 U.S. presidential election and possible collusion with the Trump campaign. Former FBI Director James Comey told Congress last week he believes he was fired by Trump to undermine the agency's Russia probe.
 
Crude oil at 7-month low
 
Oil prices wallowed near their lowest levels in seven months early on Thursday, hurt by high global inventories and doubts over OPEC's ability to implement production cuts.
 
Both benchmarks are hovering near levels last reached in late November last year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced in an effort to prop up prices.
 
Brent and WTI are down some 12% since their opens on May 25, when the agreement to cut was extended to the end of the first quarter next year, instead of expiring this month as initially planned.
 
Global Markets
 
US stock futures and Asian shares slid on Thursday, hit by soft US economic data, a relatively hawkish Fed and a media report on Trump probe for obstruction of justice. Data showed US consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months.
 
S&P mini futures dipped 0.3%. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7% while Japan's Nikkei fell 0.4%.
 
The Federal Reserve raised interest rates as expected on Wednesday and gave a first clear outline on its plan to reduce its $4.2-trillion portfolio of bonds.
 
Overnight, Wall Street ended lower with Dow Jones down 0.04%, the S&P500 dropping 0.38% and the Nasdaq falling 0.9%.