See gap up opening; Fed signals hike in interest rates slower than forecast

For the most part of the day, Indian equities market traded with a negative bias, but in the last one hour it wiped out all its losses tracking a strong opening in Europe as investors awaited the US Federal Reserve’s policy meet outcome. The Sensex ended 131 points or 0.53% higher at 24,682.48; while the NSE Nifty gained 0.51% or 38.15 points to finish at 7,498.75. The BSE Mid-Cap index fell 0.41%. The BSE Small-Cap index fell 0.17%. Both these indices underperformed the Sensex.

U.S. stocks closed higher on Wednesday, after the Federal Reserve kept its key interest rates unchanged and offered an outlook on the US economy that was less bullish than many expected. The Fed chalked out two more hikes this year, down from the initial four, for a total increase of 50 basis points, which is much more aligned with market expectations. The Dow Jones industrial average finished up about 74 points, or 0.4%. The S&P 500 gained 0.6%; and the Nasdaq composite ended up 0.8%.

European markets darted minimally between gains and losses on Wednesday, as investors waited to hear what the Federal Reserve would do about interest rates. The Stoxx Europe 600 turned down 0.2% at 340.19 after a higher opening. Germany’s DAX 30 was up 0.7% at 9,999.28; and France’s CAC 40 was up 0.2% at 4,482.45. The U.K’s FTSE 100 was up 0.2% at 6,150.66.

Oil prices surged on Wednesday on word from OPEC officials that Saudi Arabia and other leading exporters will limit their output even if Iran doesn’t cooperate. Brent crude gained 3.87% quoting USD 40.24 on the London ICE Futures Exchange. WTI crude gained 5.7% quoting USD 38.42 per barrel on the New York Mercantile Exchange.

Markets in Asia opened mostly higher on Thursday following a surge in U.S. equities, as Federal Reserve left rates unchanged and reduced the number of interest rate hikes planned for this year. Japan's Nikkei 225 index added 1.36 percent after the Yen gained 0.6% against the dollar on Wednesday. South Korea’s Kospi index rose 1.12%. Australia’s S&P/ASX 200 Index gained 1.2%. The Shanghai composite reversed initial gains and traded flatly.

While on domestic front, A SGX Nifty 50 index future for March series traded up 87.5 points at 7,613. Indian markets are likely to open gap up tracking gains in Asian shares.