All eyes will be on the Sensex today to see if the 30-pack index will claim the 60,000 milestone.
On Thursday, the BSE barometer hit an all-time high level of 59,957 before settling 958 points higher at 59,885
The broader Nifty50, on the other hand, surpassed the 17,800-mark for the first time, touching a new peak of 17,844. It, however, ended at 17,827 levels, up 280 points.
Investors reverted to broad-based buying yesterday as positive global cues lifted sentiment. For starters, a split US Federal Reserve’s abstinence from giving a timeline of interest rate hike calmed investor nerves.
While the Fed said that a slowdown in the pace of asset purchases may be warranted soon, it would be on the back of a strong economic recovery, which buoyed investors.
Going forward, Rabobank Internationlal’s senior US strategist, Philip Marey, expects the US Fed to start with one rate hike in 2022, followed by three hikes each in 2023, 2024 and 2025.
For Madhvi Arora, lead economist at Emkay Global, markets now eye the US fiscal policy, where two deadlines are looming:
First, the Congress needs to pass a continuing resolution in lieu of a budget by September 30 to avoid a government shutdown.
And second, it also needs to address the debt limit before the Treasury’s extraordinary measures get exhausted in October to avoid a default.
Given this, investors’ assessment of the Fed’s moves, coupled with developments around Evergrande Group in China, may guide the markets today.
Wall Street Journal has reported that Chinese authorities have asked local governments to prepare for the potential downfall of China Evergrande Group.
The actions are being characterized as “getting ready for the possible storm”, saying that local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion.
On the home front, pace of Covid-19 vaccination, stock specific triggers, and likely listing of Sansera Engineering will keep investors busy today.